Is There Tax on Selling Gold Australia?

Will I Pay Tax on Selling 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. Don’t rush to sell your gold make sure you do your research and keep 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 as the price might not be in your favor. 

• Only sell to a trusted gold buyer. Make sure the dealer you sell to is registered – verify that the gold dealer is registered and licensed by the Australian government to sell precious metals. 

• Understand the details of the insurance and administrative fees charged by brokers before you choose.  

• Know the purity of your gold; it determines the value of gold. Please find out how many karats your metal has to know how much it is worth.

Gold is taxable, and taxation is based on the total value in dollars rather than weight. 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. But it also depends on how long you held that gold. If you hold it for longer than a year you only need to pay tax on 50% of your profit. Anything less than 1 year will 100% taxable. 

Capital Gains Tax on Gold Bullion Australia

Capital Gains Tax (CGT) is the tax paid on the profit you make when you sell or dispose of a precious metal. You must pay capital gains tax on selling gold Australia (a 28% tax rate) if your gold bullion has a higher value during the sale in comparison to the purchase price. Capital gains taxes typically have a lower rate than your earned income tax. 

Remember you only need to pay tax on 50% of the profit if you held that investment for longer than a year. 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 do not attract Goods and Services Tax (GST). Additionally, please check the tax rules as they may change from time to time and affect the information herein.  

Capital Gains Tax on Selling Gold Jewellery

Similar to gold bullions, jewellery is a capital asset; any profit made on sale is subject to capital gain tax. You will pay taxes at the standard capital gains rate or a 28 percent general rate. You can also minimize your tax bills through tax planning. There are three strategies you can apply 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. Taxes are only paid when you sell your gold for cash.  
• Hold onto your gold for at least a year before selling to avoid higher income tax. 

Do you have to declare Gold to ATO?

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

Declaring your gold to the ATO depends on the gold you hold and how you get it. 

• Gold bullion is a capital asset if you hold gold bullion as an investment. When you 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 declare the income in your tax return.  
• If you scout for gold as a hobby, you don’t have to declare your earnings to ATO. They are not considered a business.  

Jewellery is valuable but it’s not a good investment. You can sell your precious metals to gold brokers and buyers if you are need of quick cash. The market value of gold keeps changing, and there is tax on any capital gain profit made on gold. All in all, remember that your gold jewellery has sentimental value only to you. It is not an investment, so do not expect to sell at a profit if you paid the full retail price.