INVESTMENT GOLD PURCHASES - BREAKING THE MYTHS
There are MANY myths and misunderstandings around the purchasing of
gold by individuals, and what dealers do and don't have to do to comply with the
various laws and regulations. None of this is actually very complicated, but
because the regulations make 'heavy' reading they become interpreted in
different ways. However, we at Weighton Coin Wonders like to make things very
simple, so we have created here a 'MYTH BUSTER' guide to purchasing gold.
All gold sales are generally governed by 3 different regulations, and in
general terms these are as follows:
Notice 701/21 - Investment Gold
This gives the rules regarding the purchasing of gold, the form it has to
take, and the rules governing it's supply
Notice 701/21a Investment Gold Coins
This notice gives the rules regarding what constitutes an Investment gold
coin, and the full list of Investment gold coins
The Money Laundering Regulations
These regulations govern the amounts of physical cash we can deal with.
Generally those looking to purchase the odd coin or ingot in precious metals,
do not need to think about any of the above, as the value of the purchase will
mean that none of the above need to be considered by the individual; It would
be the same as going into any shop to purchase any item. When it comes to
larger purchases of precious metals for investment, all of the above do need to
be considered, and we generally find that those looking to purchase larger
quantities are aware that these regulations exist. HOWEVER, there are several
MYTHS surrounding differing interpretations of these regulations, and we know
this from the questions we get asked by clients wishing to purchase. So we will
now let you know the 3 most frequently asked questions by potential clients
wishing to make a purchase, and we will BUST the Myths that go with them.
Do you have to report a sale to the Customs and Revenue if I purchase over
£5000's worth of gold ?
Answer - NO. This is the BIGGEST Myth in the industry. It
originates from the section in the Investment Gold Notice 701/21 as follows:
3.1 When and how do I have to notify?
The first time
that you make an exempt
investment gold which exceeds £5,000, or when the
value of your
supplies of exempt investment gold to any one
customer is over £10,000 in any 12 month period, you
must notify us within 28 days at the following address:
The Gold Team
HM Customs and Excise
Thomas Paine House
LONDON EC1V 1TA
If you are
required to notify that you trade in investment gold
and you are not registered for VAT, you must also
provide the following information:
1. Name of company, partnership or sole proprietor.
2. Company incorporation number or details of partners.
4. Telephone number.
5. Contact name.
6. Accountantís name, address and telephone number.
7. Associated VAT registration numbers.
The Gold Team will send you an acknowledgement. If,
however you do not receive this within 28 days, you must
check that they have received your notification.
You do not
need to notify us of subsequent supplies.
As you will see from the parts we have highlighted, WE have to
register as a trader of investment gold, and NOT notify every sale we make.
Weighton Coin Wonders registered a long time ago, and we have the
acknowledgement from Customs and Revenue on file. We do however have to keep
records of every sale we process as any business does, but this is for financial
/ company purposes.
If you check out section 3.2 of the same regulations, it shows the form the
notification should take, which clearly show it is the COMPANY / TRADER that is
registering, and NOT the individual sale.
We wish to purchase a quantity of gold from your website / over the
telephone. What forms of physical identification will we need to supply ?
Answer - NONE. This would just not be practical, and almost
impossible to 'police'. The law does recognise the modern day methods of
trading, and there is a section in the regulations specifically relating to
internet and mail order trading as follows:
7.4 Internet and mail order sales
If you sell investment gold over the internet or by mail
order and you fulfil the conditions at (a) or (b) below,
you may, instead of keeping the customer record set out
at paragraph 7.1(b), keep and maintain the following
(a) if your supply is paid for by credit card and the
delivery address is also the card holderís address, you
must record the name of your customer, the credit card
issuer and the card number; or
(b) if your supply is paid for by cheque, you must
record the name of your customer, the name of the bank
and the account number of your customer.
You must also keep proof of despatch of the
investment gold to your customerís address.
If you come to our premises to purchase, then you do have to provide the
required forms of Identification, but as an internet customer our database has a
complete record of every customer we deal with, and we hold all payment and
delivery details as a matter of routine.
Can I pay in CASH ?
Answer - YES. At Weighton Coin Wonders we are ALWAYS willing to
accept cash as a payment method (why wouldn't we !), but we do restrict the
amount we handle at any one time especially to new clients. If wishing to pay
via this method (for larger amounts), please call us to discuss in the first
Finally as you will all be aware, because we deal in high value transactions
we have to be very cautious, especially when dealing in CASH sales. This is
where the Money Laundering Regulations come in. These regulations (just updated
in 2007), detail the rules that govern the processing of larger cash
transactions, and highlight when and if you have to be registered with a
regulatory authority to handle large cash volumes.
Hopefully we have clarified the myths that surround this particular part of
our industry. However if there is stll something you are unsure of, please feel
free to call us and we will try to answer your query as honestly as we can.
Just bear in mind we are NOT legal experts and NOT qualified to give legal
advice. The contents of this page are OUR interpretation of the regulations
based on our dealings with the authorities to date.
50 Market Place, Market Weighton, YORK. YO43 3AL
Please feel free also to phone on
01430 879740 / 07905 467650
or email to
can then assist you in person - ask for Richard