Hey there! So, you’ve decided to Buy bullion? That’s awesome! But hold your horses, because dealing with precious metals like gold and silver comes with some tax strings attached.
First off, when you buy bullion in Canada, it’s crucial to understand how the taxman looks at it. Canada considers bullion a collectible, not just shiny metal. What does that mean for you, dear reader? Well, when you sell your gold or silver, any profit you make is subject to capital gains tax. Simply put, if you buy low and sell high, you need to share that joy with the government.
Now, let’s get into the nuts and bolts. Say you purchased gold for $1,000 and later sold it for $1,500. You just made a cool $500! But before you start planning a mini-vacation, remember that half of that profit, so $250, is taxable. Depending on your income bracket, you’ll owe a certain percentage of that $250 to the Canadian Revenue Agency (CRA).
Oh, and here’s a bit of a twist: not all bullion transactions are treated equally. If you’re selling coins, bars, or rounds, make sure you hang on to those receipts and records. The CRA loves paperwork. And trust me, you don’t want to be caught empty-handed during a tax audit.
Selling bullion isn’t the only thing you need to worry about. GST/HST applies when you buy bullion too, but there’s a kicker. You might be exempt if the bullion is considered “investment-grade.” This usually means coins or bars with a purity of at least 99.5% for gold and 99.9% for silver. Sounds complicated? Yeah, a little bit, but knowing the standards helps keep more money in your pocket.
You might be thinking, “Is all this fuss worth it?” Collecting gold and silver can be a treasure trove (pun intended) of opportunities, especially during uncertain economic times. But you need to be sharp and aware.