Gold - worthwhile in the current climate? (LTD Co)

Gold - worthwhile in the current climate? (LTD Co)

Author
Discussion

arfur

Original Poster:

3,871 posts

213 months

Monday 20th June 2022
quotequote all
Hoping PH can assist here:

I have my own ltd co which has some spare cash. I receive no interest on it at all.

I cannot pay it into pension as that route is now closed to me (lifetime hit) and I do not want to take it out of the ltd anytime soon

What can I do with it to earn some growth or interest ?

The amount available rises monthly - The amount does not really matter for this post.

Last week, after watching the stock market generally collapse and gains for most '22 wiped out, plus the devastation of BTC et al I got thinking about gold. I read various articles that gold is a safe holding over time and I like the sound of it.

If I were to buy a tube of Britannia coins and have them delivered that would cost me around 16k with a buy back price of around 14.5k. I'd therefore need to see gold go up by 10% to be in profit. Lets assume the tube of coins is now worth 20k and I can sell them for 19k, therefore showing a 3k profit over time.

I assume that when I sell them for 19k I have corp tax to account for and would like the profit in my personal account.

  • Is the corp tax original purchase price of 16k or on the increased 19k ?
  • How can I extract the profit from the sale of the coins to my personal account in the most efficient way ? Is there some CGT angle here ?
I suspect HMRC have all this covered, but I'm struggling to find clear answers when a ltd co is the original purchaser

Any experts here who can assist ?

Arf

46and2

756 posts

32 months

Monday 20th June 2022
quotequote all
I don't think you will make any gains on Gold at the current price for a long time.

The price is inflated due to fear in the markets.

arfur

Original Poster:

3,871 posts

213 months

Monday 20th June 2022
quotequote all
46and2 said:
I don't think you will make any gains on Gold at the current price for a long time.

The price is inflated due to fear in the markets.
I'm not looking for a quick buck ... I'm thinking monthly investing over >5-10 years

Scootersp

3,107 posts

187 months

Monday 20th June 2022
quotequote all
It would have been better prior to the last 12 months of £ devaluing against the $ but if you have none then why not. Just had a look and bullionbypost are doing free 6 month storage on orders over £2,500

It's probably one of the least favoured assets, but could easily go up rather than down if inflation holds and central banks can't keep raising rates and have to drop them and/or stimulate to support the economy/employment.


That_White_GT3

292 posts

170 months

Tuesday 21st June 2022
quotequote all
If your looking to hold for 5-10 years then there are a whole host of asset classes that have fallen, perfect time to get in and sell within the next 5-10 years.

DonkeyApple

54,921 posts

168 months

Tuesday 21st June 2022
quotequote all
arfur said:
I'm not looking for a quick buck ... I'm thinking monthly investing over >5-10 years
Gold is a bit like solar panels. Best left to dodgy salesmen, pensioners and man maths aficionados. wink

As you highlight in your first post, the mere act of initial purchase books a massive loss that you then have to hope to recover. That simple act is usually sufficient to confirm you're not really looking at a sensible investment.

Gold has most value as either a hedge, for making an ugly woman socially palatable among prettier women. Or for members of the Jimmy Saville fan club who like to walk around in public in leisure wear and girls jewellery.

Gold will tend to be in demand during economic uncertainty as the wealthy seek to diversify to less risky stores. Or if central banks feel the need to bolster reserves. Even the Asian wedding market can push prices.

I'm not sure there are any overt drivers to see gold give a clear return over the next 5-10 years.

Besides, you're so offside in the first instance (and don't forget that spread will widen considerably should you want to selling when the price is falling and also don't forget that as physical gold is unregulated the vendors can tell you whatever they like to get you to buy) that you could sit on cash at 1% for years and outperform.

arfur

Original Poster:

3,871 posts

213 months

Tuesday 21st June 2022
quotequote all
DonkeyApple said:
Gold is a bit like solar panels. Best left to dodgy salesmen, pensioners and man maths aficionados. wink

As you highlight in your first post, the mere act of initial purchase books a massive loss that you then have to hope to recover. That simple act is usually sufficient to confirm you're not really looking at a sensible investment.

Gold has most value as either a hedge, for making an ugly woman socially palatable among prettier women. Or for members of the Jimmy Saville fan club who like to walk around in public in leisure wear and girls jewellery.

Gold will tend to be in demand during economic uncertainty as the wealthy seek to diversify to less risky stores. Or if central banks feel the need to bolster reserves. Even the Asian wedding market can push prices.

I'm not sure there are any overt drivers to see gold give a clear return over the next 5-10 years.

Besides, you're so offside in the first instance (and don't forget that spread will widen considerably should you want to selling when the price is falling and also don't forget that as physical gold is unregulated the vendors can tell you whatever they like to get you to buy) that you could sit on cash at 1% for years and outperform.
That's really useful in a lot of ways ... thx


Scootersp

3,107 posts

187 months

Tuesday 21st June 2022
quotequote all
Sentiment it low to non existent!

However, central banks like it for some reason.

"Since 2010, central banks have been consistent net buyers of gold (although there were also several instances of monthly net sales in 2016 and 2020). Last year, central banks around the world bought a total of 463 tons of gold. That's 82% more than in 2020!"


TobyTR

1,068 posts

145 months

Monday 27th June 2022
quotequote all
DonkeyApple said:
arfur said:
I'm not looking for a quick buck ... I'm thinking monthly investing over >5-10 years
Gold is a bit like solar panels. Best left to dodgy salesmen, pensioners and man maths aficionados. wink

As you highlight in your first post, the mere act of initial purchase books a massive loss that you then have to hope to recover. That simple act is usually sufficient to confirm you're not really looking at a sensible investment.

Gold has most value as either a hedge, for making an ugly woman socially palatable among prettier women. Or for members of the Jimmy Saville fan club who like to walk around in public in leisure wear and girls jewellery.

Gold will tend to be in demand during economic uncertainty as the wealthy seek to diversify to less risky stores. Or if central banks feel the need to bolster reserves. Even the Asian wedding market can push prices.

I'm not sure there are any overt drivers to see gold give a clear return over the next 5-10 years.

Besides, you're so offside in the first instance (and don't forget that spread will widen considerably should you want to selling when the price is falling and also don't forget that as physical gold is unregulated the vendors can tell you whatever they like to get you to buy) that you could sit on cash at 1% for years and outperform.
yeah lets just gloss over the fact that every currency throughout history fails (average currency lifespan is 85 years) and that Gold has outperformed the S&P500 since 2000... and that we are experiencing massive Inflation that will not be kerbed by central banks and flawed keynsian economics.

When you divide the current M2 money/currency supply by the price of Gold it's still under-valued with more upside potential. And that's before we get into a potential for a Bretton-Woods 3.0... there's a reason why majority of Central Banks have been increasing their Gold reserves - because it is true sound money.

I did LOL at sitting on cash at 1% when real inflation (not CPI / CP-Lie) is over 15%.

Scootersp

3,107 posts

187 months

Monday 27th June 2022
quotequote all
It's an interesting topic....

It gets almost zero mainstream hype, in fact it gets more 'anti hype' ?
Yet central banks do buy it
Cash money used to be transferable directly for it.
But it's just a metal with not many uses
It's been precious for many years, and still no wife wants a stainless steel ring!
Important people were buried with it
Then people would risk their lives to steal it
We award it for great achievements (even in representative form ie "Gold Star")
One of the few ways to physically possess some concentrated wealth
But also antiquated/unnecessary/superseded these days?
Harder to secure/easier to lose
Can't be confiscated easily by others with just a keystroke
But can be legislated against to effectively confiscate



DonkeyApple

54,921 posts

168 months

Monday 27th June 2022
quotequote all
TobyTR said:
DonkeyApple said:
arfur said:
I'm not looking for a quick buck ... I'm thinking monthly investing over >5-10 years
Gold is a bit like solar panels. Best left to dodgy salesmen, pensioners and man maths aficionados. wink

As you highlight in your first post, the mere act of initial purchase books a massive loss that you then have to hope to recover. That simple act is usually sufficient to confirm you're not really looking at a sensible investment.

Gold has most value as either a hedge, for making an ugly woman socially palatable among prettier women. Or for members of the Jimmy Saville fan club who like to walk around in public in leisure wear and girls jewellery.

Gold will tend to be in demand during economic uncertainty as the wealthy seek to diversify to less risky stores. Or if central banks feel the need to bolster reserves. Even the Asian wedding market can push prices.

I'm not sure there are any overt drivers to see gold give a clear return over the next 5-10 years.

Besides, you're so offside in the first instance (and don't forget that spread will widen considerably should you want to selling when the price is falling and also don't forget that as physical gold is unregulated the vendors can tell you whatever they like to get you to buy) that you could sit on cash at 1% for years and outperform.
yeah lets just gloss over the fact that every currency throughout history fails (average currency lifespan is 85 years) and that Gold has outperformed the S&P500 since 2000... and that we are experiencing massive Inflation that will not be kerbed by central banks and flawed keynsian economics.

When you divide the current M2 money/currency supply by the price of Gold it's still under-valued with more upside potential. And that's before we get into a potential for a Bretton-Woods 3.0... there's a reason why majority of Central Banks have been increasing their Gold reserves - because it is true sound money.

I did LOL at sitting on cash at 1% when real inflation (not CPI / CP-Lie) is over 15%.
I think the glossing is being done on the other side. wink

2000 to 2011 was the last time gold rose. That was off the back of a heavily deflated base and a return to storage by Central Govts. The price in 2022 has the same USD value as 2011. Zero change but worse, that's the period of massive QE and currency devaluation and gold actually fell back during the first 6 years of QE and has only started to rise recently, albeit stalled on Covid and remains today, lower than prior to Covid!

Anyone can cherry pick a data set to try and change a reality. One only has to look at a petrol thread to see this but the reality is for a realistic perspective one needs the whole picture.

One also, when contrasting to cash needs to very much recognise the difference between physical and paper. The OP in this thread is referring to physical which has very significant transaction costs that have to be overcome, storage costs (for sensible investors, ie insurance) and other factors that need to be considered. The OP was also mooting an all in investment which then requires certain obvious risks to be accounted for. Plus, there may be tax considerations if using an LTD.

arfur

Original Poster:

3,871 posts

213 months

Monday 27th June 2022
quotequote all
DonkeyApple said:
TobyTR said:
DonkeyApple said:
arfur said:
I'm not looking for a quick buck ... I'm thinking monthly investing over >5-10 years
Gold is a bit like solar panels. Best left to dodgy salesmen, pensioners and man maths aficionados. wink

As you highlight in your first post, the mere act of initial purchase books a massive loss that you then have to hope to recover. That simple act is usually sufficient to confirm you're not really looking at a sensible investment.

Gold has most value as either a hedge, for making an ugly woman socially palatable among prettier women. Or for members of the Jimmy Saville fan club who like to walk around in public in leisure wear and girls jewellery.

Gold will tend to be in demand during economic uncertainty as the wealthy seek to diversify to less risky stores. Or if central banks feel the need to bolster reserves. Even the Asian wedding market can push prices.

I'm not sure there are any overt drivers to see gold give a clear return over the next 5-10 years.

Besides, you're so offside in the first instance (and don't forget that spread will widen considerably should you want to selling when the price is falling and also don't forget that as physical gold is unregulated the vendors can tell you whatever they like to get you to buy) that you could sit on cash at 1% for years and outperform.
yeah lets just gloss over the fact that every currency throughout history fails (average currency lifespan is 85 years) and that Gold has outperformed the S&P500 since 2000... and that we are experiencing massive Inflation that will not be kerbed by central banks and flawed keynsian economics.

When you divide the current M2 money/currency supply by the price of Gold it's still under-valued with more upside potential. And that's before we get into a potential for a Bretton-Woods 3.0... there's a reason why majority of Central Banks have been increasing their Gold reserves - because it is true sound money.

I did LOL at sitting on cash at 1% when real inflation (not CPI / CP-Lie) is over 15%.
I think the glossing is being done on the other side. wink

2000 to 2011 was the last time gold rose. That was off the back of a heavily deflated base and a return to storage by Central Govts. The price in 2022 has the same USD value as 2011. Zero change but worse, that's the period of massive QE and currency devaluation and gold actually fell back during the first 6 years of QE and has only started to rise recently, albeit stalled on Covid and remains today, lower than prior to Covid!

Anyone can cherry pick a data set to try and change a reality. One only has to look at a petrol thread to see this but the reality is for a realistic perspective one needs the whole picture.

One also, when contrasting to cash needs to very much recognise the difference between physical and paper. The OP in this thread is referring to physical which has very significant transaction costs that have to be overcome, storage costs (for sensible investors, ie insurance) and other factors that need to be considered. The OP was also mooting an all in investment which then requires certain obvious risks to be accounted for. Plus, there may be tax considerations if using an LTD.
It was the cashing out via the LTD that I was interested in - I was only considering CG free 999.99 Britannia coins. I just could not see how I could (assuming I made a profit) get said profit (minus S660) to myself without incurring more tax on the way - or whether there was a CG free angle that HMRC had not yet thought of !

The replies to the thread have pretty much made it clear that it's probably pointless, and certainly painful to hold physical gold and use it as a investment.

Thx for the thoughts on this though - appreciated

DonkeyApple

54,921 posts

168 months

Monday 27th June 2022
quotequote all
Back in the 80s some City firms were paying staff in gold to take advantage of the absence of taxes. I would imagine that loophole has been firmly closed. As for what the current liabilities are I have no idea but an accountant would know how the asset would be treated.


TobyTR

1,068 posts

145 months

Monday 27th June 2022
quotequote all
DonkeyApple said:
TobyTR said:
DonkeyApple said:
arfur said:
I'm not looking for a quick buck ... I'm thinking monthly investing over >5-10 years
Gold is a bit like solar panels. Best left to dodgy salesmen, pensioners and man maths aficionados. wink

As you highlight in your first post, the mere act of initial purchase books a massive loss that you then have to hope to recover. That simple act is usually sufficient to confirm you're not really looking at a sensible investment.

Gold has most value as either a hedge, for making an ugly woman socially palatable among prettier women. Or for members of the Jimmy Saville fan club who like to walk around in public in leisure wear and girls jewellery.

Gold will tend to be in demand during economic uncertainty as the wealthy seek to diversify to less risky stores. Or if central banks feel the need to bolster reserves. Even the Asian wedding market can push prices.

I'm not sure there are any overt drivers to see gold give a clear return over the next 5-10 years.

Besides, you're so offside in the first instance (and don't forget that spread will widen considerably should you want to selling when the price is falling and also don't forget that as physical gold is unregulated the vendors can tell you whatever they like to get you to buy) that you could sit on cash at 1% for years and outperform.
yeah lets just gloss over the fact that every currency throughout history fails (average currency lifespan is 85 years) and that Gold has outperformed the S&P500 since 2000... and that we are experiencing massive Inflation that will not be kerbed by central banks and flawed keynsian economics.

When you divide the current M2 money/currency supply by the price of Gold it's still under-valued with more upside potential. And that's before we get into a potential for a Bretton-Woods 3.0... there's a reason why majority of Central Banks have been increasing their Gold reserves - because it is true sound money.

I did LOL at sitting on cash at 1% when real inflation (not CPI / CP-Lie) is over 15%.
I think the glossing is being done on the other side. wink

2000 to 2011 was the last time gold rose. That was off the back of a heavily deflated base and a return to storage by Central Govts. The price in 2022 has the same USD value as 2011. Zero change but worse, that's the period of massive QE and currency devaluation and gold actually fell back during the first 6 years of QE and has only started to rise recently, albeit stalled on Covid and remains today, lower than prior to Covid!

Anyone can cherry pick a data set to try and change a reality. One only has to look at a petrol thread to see this but the reality is for a realistic perspective one needs the whole picture.

One also, when contrasting to cash needs to very much recognise the difference between physical and paper. The OP in this thread is referring to physical which has very significant transaction costs that have to be overcome, storage costs (for sensible investors, ie insurance) and other factors that need to be considered. The OP was also mooting an all in investment which then requires certain obvious risks to be accounted for. Plus, there may be tax considerations if using an LTD.
5,000+ years of inflation-beating history...

and tell the families during Weimar and Venezuela hyper-inflation that it's best left to dodgy salesmen etc... those that held physical Gold & Silver survived and prospered, while their currencies failed - just like they all do eventually. The US dollar has already lost 98% of its purchasing power.

History doesn't repeat itself but it often rhymes wink

Derek Chevalier

3,942 posts

172 months

Monday 27th June 2022
quotequote all
TobyTR said:
5,000+ years of inflation-beating history...
As we've discussed before, given the volatility, the risk vs return of gold isn't great over the long term vs, for example, equities.

£1000 invested in 1925

Global equities: £14m
Gold: £318k

DonkeyApple

54,921 posts

168 months

Monday 27th June 2022
quotequote all
TobyTR said:
5,000+ years of inflation-beating history...

and tell the families during Weimar and Venezuela hyper-inflation that it's best left to dodgy salesmen etc... those that held physical Gold & Silver survived and prospered, while their currencies failed - just like they all do eventually. The US dollar has already lost 98% of its purchasing power.

History doesn't repeat itself but it often rhymes wink
Ah, so this is actually nothing at all to do with this thread just some random religious posts trying to convert non believers?

Scootersp

3,107 posts

187 months

Monday 27th June 2022
quotequote all
DonkeyApple said:
Ah, so this is actually nothing at all to do with this thread just some random religious posts trying to convert non believers?
I believe there is room for a happy medium! It's a very divisive topic, it tends to present with polar opposite views with slightly derogatory tags given.

There is only one reason I can think that central banks buy it and that's because one day they think they might need it? like a ancient security blanket? and these are the people that do make the financial rules and can change them?





DonkeyApple

54,921 posts

168 months

Monday 27th June 2022
quotequote all
Scootersp said:
I believe there is room for a happy medium! It's a very divisive topic, it tends to present with polar opposite views with slightly derogatory tags given.

There is only one reason I can think that central banks buy it and that's because one day they think they might need it? like a ancient security blanket? and these are the people that do make the financial rules and can change them?
The problem is that when there is an extreme view that view will always be at odds with more than one use of the material.

Ie, gold clearly has a value and clearly serves a purpose. Believing that in a specific situation it may not serve any sane purpose is not the same as believing it never serves any purpose.

So in this particular thread where an OP was looking at a specific scenario, stating that gold performs well over a 5000 year outlook compared to a major currency or that it can be an efficient means to cross borders rapidly in a violent geographical scenario are really all that relevant. wink

If the OP has asked what the best store of wealth might be for a zombie apocalypse or for a plan to live to be 5000 years old then they might be valid arguments. biggrin

The point being that just because gold may be a poor store of value in one scenario doesn't mean it's bad for another and vice versa, just because it's good for zombie holocausts or 5000 year investment horizons doesn't mean it's any good as an alternative for toilet paper.

For most people in a stable economy and with a typical lifespan, beyond sensible exposure as part of a broad portfolio or making phone calls, gold serves almost not purpose other than making old men less terrified of the world outside and for offloading ugly daughters.

arfur

Original Poster:

3,871 posts

213 months

Monday 27th June 2022
quotequote all
DonkeyApple said:
Scootersp said:
I believe there is room for a happy medium! It's a very divisive topic, it tends to present with polar opposite views with slightly derogatory tags given.

There is only one reason I can think that central banks buy it and that's because one day they think they might need it? like a ancient security blanket? and these are the people that do make the financial rules and can change them?
The problem is that when there is an extreme view that view will always be at odds with more than one use of the material.

Ie, gold clearly has a value and clearly serves a purpose. Believing that in a specific situation it may not serve any sane purpose is not the same as believing it never serves any purpose.

So in this particular thread where an OP was looking at a specific scenario, stating that gold performs well over a 5000 year outlook compared to a major currency or that it can be an efficient means to cross borders rapidly in a violent geographical scenario are really all that relevant. wink

If the OP has asked what the best store of wealth might be for a zombie apocalypse or for a plan to live to be 5000 years old then they might be valid arguments. biggrin

The point being that just because gold may be a poor store of value in one scenario doesn't mean it's bad for another and vice versa, just because it's good for zombie holocausts or 5000 year investment horizons doesn't mean it's any good as an alternative for toilet paper.

For most people in a stable economy and with a typical lifespan, beyond sensible exposure as part of a broad portfolio or making phone calls, gold serves almost not purpose other than making old men less terrified of the world outside and for offloading ugly daughters.
My reason for the OP was simply what to do with what is essentially a spare sum of money on a monthly basis - gold is something I know nothing about and as usual PH has given me various food for thought - thanks.

I did say in the OP that the amount didn't matter, but I would think it's around the 8k pcm that I used to put into pension, but no longer can. I did also look at gilts, but ffs - even that is only 1% pa voucher for 5 years ..

I suspect it will just sit there for 10 years accumulating and I'll take the 10% entrepreneur relief (if it still exists) at some point when I retire.

Scootersp

3,107 posts

187 months

Monday 27th June 2022
quotequote all
I get that for the OP the comments were way off on a tangent

DonkeyApple said:
For most people in a stable economy and with a typical lifespan, beyond sensible exposure as part of a broad portfolio
I think this is you saying it has a place as sensible (very low % I know) exposure....ie to have none could be considered more risky than to have a bit, regardless of any impending disasters.

The zombie apocalypse phraseology implies it's nuts to have any?

Article from 2017 so way before covid etc and the Germans are not known for their frivolousness? The backdrop for this being negative interest rates

https://www.usfunds.com/resource/germans-have-quie...