If you're thinking about investing in bullion or bullion coins, the Federal Trade Commission (FTC), the nation's consumer protection agency, says your best bet is to research your options and get smart. Being uninformed can have serious consequences.
Bullion is a bulk quantity of precious metal, usually gold or silver, assessed by weight, typically cast as ingots or bars, and sold by major banks and dealers. You also can buy bullion as coins.
Bullion coins are minted from precious metal, usually gold or silver, and bought for investment purposes from major banks, coin dealers, brokerage firms, and precious metal dealers. Their value is based on their gold or silver bullion content. Prices fluctuate daily, depending on the price of gold and silver in the world markets.
Mint Companies produce two different types of bullion coins:
● Proof bullion coins, which are specially minted for collectors and usually sold in a protective display case directly by the Mint.
● Uncirculated bullion coins, which are minted for investment purposes and sold to a select number of authorized buyers based on the current market price (the spot price) for the precious metal plus a small premium charged by the Mint.
The value of foreign bullion coins depends primarily upon the coin's melt value – the basic intrinsic bullion value of a coin if it were melted and sold. A bullion coin's condition – its "grade" – isn't the most relevant factor in determining its price.
The Royal Mint’s Sovereign and Britannia gold bullion coins are considered to be among some of the best gold coins to buy worldwide.
If you want to keep your taxes to a minimum, consider gold Sovereigns and Britannias, which are exempt from both VAT and CGT, while silver Britannias are CGT-free but still carry VAT.