Is There a Tax on Selling Gold in Australia?

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    Tax-on-Selling-Gold-Australia

    Is there a Tax on Selling Gold in Australia? With a thriving gold market, this is commonly asked question, so let’s see.

    Australia is known to have the largest share of gold resources in the world and it exports gold to over 55 countries. The gold industry contributed $23 billion to Australia’s economy in 2021 and it’s an essential contributor to government revenues.

    Australia’s gold industry provides employment and is a source of income for many people. The industry is also a way to get instant cash for many families when they sell their gold jewellery.

    You can easily exchange different forms of gold for cash by:

    Even though you usually can sell gold for good money, owning and holding onto gold or diamond jewellery isn’t necessarily a good investment for most people.

    In fact, more often than not it it’s not because no gold or diamond buyer will pay a price higher than what they get from their suppliers (direct wholesalers or metal dealers), which is always much lower than the retail price you paid at the jewellery store.

    How to sell your gold

    You can sell your gold jewelry (earrings, necklaces, bracelets, or rings) or other forms of gold in Australia to reliable gold/jewellery buyers online. You can also sell physically by visiting a pawn shop, so don’t rush to sell.

    Start by making sure you do your research while keeping the following points in mind:

    • Be aware of the current market rate and value of gold. You will only get the best deal if you sell at the right time. Sometimes it may be worth waiting until the price is in your favor. 

     

    Tax on Selling Gold Australia

     

    • Only sell to a trusted gold buyer. Make sure the dealer you’re doing business with is registered and licensed by the Australian government to sell precious metals. 

     

    Tax on Selling Gold Australia

     

    • Understand the insurance’s details and also the administrative fees to be charged by brokers before you make your final decision.

     

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    • Know the purity of your gold as it determines the value you can sell it for. Find out the karats of your precious metal so you can recognise a good offer.

     

    Calculate Gold Value

    Will I Pay Tax on Selling Gold?

    Gold is taxable and this taxation is based on the total value in dollars rather than weight. Some important points to remember include:

    • You are liable to taxation only when you make a profit from selling gold. Typically, the more profit you make the more tax you will have to pay.
    • How much tax you pay also depends on how long you held your gold. If you hold it for longer than a year you’re only required to pay tax on 50% of your profit. However, anything less than a year will be 100% taxable. 

     

    Tax on Selling Gold Australia

    Capital Gains Tax on Gold Bullion in Australia

    Capital Gains Tax (CGT) is the tax paid on the profit you make when you sell gold or other precious metal. You must pay capital gains tax when selling gold in Australia (a 28% tax rate) if your gold bullion has a higher value during the sale than when you acquired it originally. 

    Capital gains taxes typically have a lower rate than your earned income tax. 

     

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    Remember you only need to pay tax on 50% of the profit if you held that investment for longer than a year and don’t forget to deduct the purchase cost from the sale price to calculate your capital gain.

    Also, note that sales of investment-grade gold bullion aren’t subject to Goods and Services Tax (GST). That said, please check the tax rules often, as they may change occasionally and you may need to adjust your statement and payment accordingly.

    Capital Gains Tax on Selling Gold Jewellery

    goldjewellery

    Similar to gold bullion, jewellery is a capital asset. This means that any profit made on its sale must pay capital gain tax. 

    You will pay taxes at the standard capital gains rate of 28%. You can also minimize your tax bills through some careful tax planning. There are three strategies you can employ to reduce capital gains tax on gold: 

    • Avoid spending money on physical metals when the price is relatively high. 
    • Reinvest your money from the gold sale to buy more gold, as taxes are only paid when you exchange your gold for cash.  
    • Hold onto your gold for at least a year before selling to avoid a higher income tax.

    Do you have to declare Gold to ATO?

    The Australian Taxation Office is the primary revenue collection authority of the Australian government. Their role is to ultimately shape and control tax, superannuation systems, and other fund-related matters for Australians. ATO collects goods and services tax (GST), income tax, and other federal taxes. It is essential to declare all your sources of income to ATO.

    Tax on Selling Gold Australia

    How you declare your gold to the ATO depends on the type of gold you hold and how you obtained it. 

    • Gold bullion is a capital asset if you hold it as an investment. When you decide to sell it, you must calculate a capital gain or loss and declare it on your tax return. 
    • Gold gifts from friends or relatives are not taxable, so you do not need to include them as income in your tax return.  
    • If you scout for gold as a hobby, you don’t have to declare your earnings to ATO as it’s not considered a business. 

     

     

    While jewellery is valuable, it’s not really a good investment. 

    You can sell your precious metals to gold brokers and buyers if you need quick cash, but the market value of gold keeps changing, and there is a tax on any capital gain profit made on gold. 

    All in all, remember that your gold jewellery has sentimental value only to you. Do not expect to sell at a profit on the secondary market if you paid full retail price.

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