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Help and information for existing and prospective BullionVault users from the United States

Nearly a quarter of BullionVault’s users are from the US.

 

The vast majority of them have found it straightforward to use BullionVault, but there are some common questions which come up from time to time.

 

This page attempts to answer those common questions and provide links to other sources of information which might be useful to a US citizen/resident.

 

  • BullionVault compared to small bars and coins

  • Allocated bullion

  • Funding your BullionVault account

  • Capital Gains tax

  • Sales tax

  • Reporting

  • FATCA

  • Individual Retirement Accounts (IRAs)

BullionVault compared to small bars and coins

BullionVault lets you buy gold, silver and platinum at wholesale prices. Starting from as little as 1 gram at a time – less than 1/30th of an ounce – this means you avoid the extra expenses and hassles which retail investors usually suffer in the bullion market.

 

There are two big problems with small bars and coins which BullionVault helps you overcome. First, those smaller units carry much higher costs. Fabricating a coin, for instance, means the Mint will typically start with a large, wholesale bar (400 ounces in gold, 1000 ounces in silver or between 1 and 6 kilograms in platinum) and then melt it down to produce 1-ounce units. On top of those extra production costs, the investor also has to cover the extra shipping fees as that metal is moved into and out of the Mint, plus the operating, distribution and retailing costs.

 

Second, holding small units in your hand means you'll suffer many more difficulties when it comes time to sell. Shopping around between different dealers or online auction sites takes time – time you may not want to waste if you need to sell urgently. You'll also have to pay delivery costs and wait for payment, eating into the money your sale raises. That widens still further the "spread" between the price you paid when you bought and the price you receive when you sell. At best that spread runs to 5% or so on gold products, and it is typically much wider for silver.

 

You avoid both these problems by using BullionVault. All the gold, silver and platinum you buy is held in the form of large, wholesale-market bars. It is stored securely inside market-accredited vaults, and it is ready for you to sell the moment you choose. You can either offer it to the thousands of other people using BullionVault worldwide through our live online Order Board, setting your own price or accepting theirs. Or you can also sell it directly onto the professional wholesale market at the next Daily Price, the globally recognized benchmark achieved by trading banks and dealers through the world's largest bullion market in London.

Allocated bullion

Allocated bullion means gold, silver or platinum physically held in secure storage and owned outright by the client. Specific bars are segregated from other accounts, and the custodian itemizes those bars on a formal Bar List. The investor is not exposed to anyone else's financial situation.

 

This is very different to "unallocated" metal. There, no specific bars are set aside, and the client is in fact owed metal by the bank, refinery or trading company providing the service. This exposes you to their financial situation, because it is carried on their balance sheet or accounts. If the company would fail or go bankrupt then you would have to join the line behind their creditors to try and recover your share. There doesn't in fact need to be any gold, silver or platinum held for the account. Because unallocated bullion is simply a promise to deliver rather than physically held metal in custody for your account.

 

BullionVault only offers allocated bullion. Specific bars are segregated for BullionVault clients inside independent vaults. Your metal belongs to you, and is your outright property, this is made very plain in each of: our publicly released audited Balance Sheet, where client property is not listed;

the Storage Agreement with the custodians (Brinks Inc. and Loomis International);

our freely published Terms and Conditions online; and

your monthly payment of a commercial safekeeping fee (which has previously proven decisive in proving the custodial relationship in law).

Full allocation of BullionVault Clients' property is proven each day by the independently verified Daily Audit. This unique process shows that the full total of client holdings is being cared for by the specialist custodians. You can study this public reconciliation for yourself online. Or see the professional study undertaken by independent accountants here.

Funding your BullionVault account

BullionVault is a UK registered company based in London. Our bankers are Lloyds Bank in the UK, and Wells Fargo in the US. It is the account at Wells Fargo through which we accept US client $ deposits.

 

Detailed instructions for how to send funds to BullionVault at Wells Fargo.

 

However you send funds to BullionVault, it is very important you include your username somewhere on the payment, usually in the reference or memo field or if asked for your customer account number. This ensures that we can match your funds with your BullionVault account.

Taxes of profits

If you generate a profit through the purchase and subsequent sale of bullion, you may be liable to report and pay taxes whether at the regular income rate or as Capital Gains. Please consult with your personal tax advisor for more information. BullionVault does not issue Forms 1099. The information required to determine your profits should be available from your monthly statements.

Sales tax

Gold – BullionVault does not charge sales tax on purchase or sale of gold bought through BullionVault or upon its physical withdrawal from the vault.

Silver and platinum – BullionVault does not charge sales tax on purchase or sale of silver or platinum when held as normal in one of the professional vaults offered. Sales tax will be charged if you choose to withdraw your physical silver or platinum from the vault. Because BullionVault is registered in UK, VAT on physical withdrawals would be charged at 20% and paid by BullionVault on your behalf to UK HM Revenue & Customs.

Reporting

Report of Foreign Bank and Financial Accounts (FBAR).

While BullionVault does not consider itself to be a 'financial institution', if you have a financial interest in or signature authority over a foreign financial account, the Bank Secrecy Act may require you to report the account yearly to the Department of Treasury by electronically filing a Financial Crimes Enforcement Network (FinCEN) 114, Report of Foreign Bank and Financial Accounts (FBAR).

 

United States persons are required to file an FBAR if:

 

The United States person had a financial interest in or signature authority over at least one financial account located outside of the United States; and

The aggregate value of all foreign financial accounts exceeded $10,000 at any time during the calendar year to be reported.

If you are in any doubt about whether you should file an FBAR as a result of having a BullionVault account, we recommend you consult with your tax advisor.

 

More information can be found on the IRS website.

 

Form 8938

 

The Foreign Account Tax Compliance Act (FATCA) requires U.S. citizens and residents to file Form 8938 listing “foreign financial assets” with an aggregate value of $50,000 or more with their annual tax return. While the guidance on the IRS website indicates that if you hold precious metals directly for investment purposes in a foreign country, you are not required to file Form 8938, it does not clearly define what ‘directly held’ means.

 

Again, if you are in any doubt about whether you should file Form 8938 as a result of having a BullionVault account, we recommend you consult with your tax advisor.

FATCA

The Foreign Account Tax Compliance Act (FATCA) was enacted in 2010 by Congress to target non-compliance by U.S. taxpayers using foreign accounts. To learn more, read this statement about BullionVault and FATCA from BullionVault's Founder and Chairman, Paul Tustain.

Individual Retirement Accounts (IRAs)

Through a Self-Directed IRA you can invest in gold and silver for your retirement. For more information, please see our IRA information page.

This information presented here is not intended to constitute legal or tax advice and should not be relied upon in lieu of consultation with your legal or tax advisor.

 

© BullionVault Ltd 2020.

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