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Posts by: Glint

Ask Glint Anything: Query from one of our readers on Capital Gains Tax

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“Say, I buy £1000 worth of gold and hold it on my Glint card, the price goes up so the value on my card is now £1500. I buy items using the card, but gold still rises, how does one deal with capital gains tax on the annual tax return? How do you calculate it? Does the reverse apply if gold drops, can I declare this as a loss against future gains?”

Reply from Sen Ramachandran, Finance Director

Good question, first of all, I should point out that Glint does not offer advice on tax matters and so this specific question: “how does one deal with CGT on the annual tax return” would be a question for your tax advisor.

However, to help explain what happens with Capital Gains(CGT), Capital Gains Tax is a tax on the profit when you sell (or ‘dispose of’) something (an ‘asset’) that’s increased in value. It’s the gain you make that’s taxed, not the amount of money you receive.

Example: You bought gold for £1,000 and sold the gold to fiat (local currency) / or made a purchase using Gold for £1,500. This means you made a gain of £500 (£1,500 minus £1,000). It is the gain which would be taxable for the purposes of the CGT calculation. A capital loss occurs when a purchase is made (gold sold) with a decrease in asset value.

We would also refer our UK-based clients to HMRC’s website which provides further details on Capital Gains Tax.

What’s Your Gold Story: Ian Cockerill

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Ian Cockerill is a British-born geologist, mining engineer and former president and CEO of Gold Fields Ltd, as well as holding senior executive roles with Anglo American plc. He is currently non-executive chairman of Polymetal, the FTSE 100 listed Russian gold producer and a non-executive director of BHP Ltd.

“I guess my real introduction to gold started back in the 1970s when I was studying geology at the University of London. Having the star sign of Leo, it’s hardly surprising I was intrigued by the yellow metal, but it was during the 70s, when Nixon made the fateful announcement of decoupling the dollar from Gold. In all honesty, at the time, I had no clue this was such a momentous call but reading the papers then maybe I had a subconscious inkling it was going to become really big news.

My fascination with gold led to a lifetime career in the mining business, covering a variety of minerals and metals, but predominantly focused on gold. I’m no ‘Flat earth, Montana revivalist’ when it comes to gold but I appreciate its enduring characteristics, its physical beauty, and its historic value as a store of wealth. Whilst it faces increasing competition from the likes of cryptocurrencies, there’s no doubt gold should form an important part of anyone’s long-term investment portfolio and with the help of Glint, it’s going to transform a once “barbarous relic” into an important component of the day-to-day monetary system”.

From The Engine Room: Emmanuel Ide

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We are delighted to welcome to Glint our new Head of Engineering, Emmanuel Ide. Emmanuel will be responsible for growing our world-class product team and continuing to enhance the user experience as well as deliver new features for our clients. This hire is integral to Glint fulfilling its growth plans and expanding market share.

Emmanuel has 15 years leadership experience in technology and product, working for B2C and B2B start-ups and scale-ups. He was most recently, Chief Technology Officer at Curio, a media platform for high-quality audio journalism. As CTO, Emmanuel was responsible for founding and growing both the product teams and data teams to support the rapid growth of the company. During his tenure as CTO, Curio successfully closed a $9m Series A funding round in September 2020.

Prior to Curio, Emmanuel demonstrated a strong record of building and managing high performing teams and successful product, holding roles as Head of Technology at online accountancy firm Crunch, CTO at art therapy non-profit Chroma, Head of Development at a business logistics specialist Quru, as well as software development roles at Motorola and

Emmanuel says: “Glint’s ambition to democratise gold and to give everyone an equal opportunity to prosper is inspirational. I’m proud to be joining such a talented leadership team with a deep knowledge of the industry and have a great opportunity to shape Glint’s future and establish it as a premier payments platform. I have the exciting role of building on and leading a dedicated team that are already working tirelessly to ensure that Glint’s platform provides our clients with the best possible user experience to allow them to take advantage of the alternative currency revolution”.

In welcoming Emmanuel, Glint’s CEO Jason Cozens, said: “Emmanuel brings fantastic expertise to Glint and we’re delighted to welcome him to the team. As a FinTech, we know the user experience of our platform is integral to our success and this is something that he will be overhauling over the next few months. It is something that our clients expect, and Emmanuel is the perfect hire to meet this challenge and lead the creation of a truly world-class mobile app and platform”.

Press Room: Glint in the news!

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It’s been another busy month at Glint with plenty of government announcements! Plus we’ve welcomed a new addition to our leadership team as Emmanuel Ide joins Glint as our new Head of Engineering. Emmanuel has great plans to transform the user experience of our platform – his appointment was covered in Finextra.

UK borrowing hit £19tn in February – up a staggering 1170% on the year – eroding the value of our savings even further. Jason’s commentary appeared in the Daily Express and MSN looking at what this could mean for our personal finances.

The UK saw one of its biggest political events of the year earlier this month as Chancellor Rishi Sunak presented the annual Budget to parliament. He announced that over £400bn had been borrowed to support the UK through the pandemic and it’s likely that we haven’t felt the worst of the financial impact yet! Glint’s commentary from Budget day was covered by Tech StartupsScottish Financial Review and Disruption Banking.

Jason met with Fintech Finance and his interview was published in The Fintech Magazine. During the interview, Jason discusses what led him to start Glint, why more clients are turning to gold through Glint’s platform and the long-term performance of gold.

In the UK, the Office for National Statistics announced the latest household spending statistics which hit the lowest level since 2015-16. Jason’s commentary on the announcement and how this impacts consumers and savers was published by The Fintech Times. He discusses how savers are forced to entrust even more of their wealth to banks as a result of historically low-interest rates, and the continued threat of negative interest rates later this year.

Jason’s article for Fintech Futures discussed the alternative currency revolution and the role of gold in securing our future financial security and taking control of our finances.

Democratising gold is one of the main reasons Glint was launched so we welcome anything that unlocks accessibility and allows consumers to take control of their finances. The World Gold Council joining the WealthiHer Network, which aims to promote female financial equality, is certainly something that should be applauded. Jason was asked for his thoughts on the partnership by Disruption Banking.

We all know that gold prices have dipped during 2021 but the long-term fundamentals that attracted us to gold still remain in place. Jason discussed some of the factors that are attracting increasing numbers of clients to gold and Glint with Disruption Banking.

Glint Special Report: Enterprise Investment Schemes (EIS) could offer tax relief – Guy Kelland reports

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We want you to have as much information as possible when considering investing in Glint, so we asked leading taxation expert Guy Kelland, to share his views on UK investors making an EIS qualifying investment into Glint’s Crowd Funding campaign.

Approaching tax year-end, many people’s thoughts will naturally turn towards tax-efficient investments and ensuring that pension contributions and ISA pots are topped up. But with limits on ISAs and increased restrictions on pensions, once these options are maxed-out the next question should be ‘what’s next?’

The answer could be Enterprise Investment Schemes or EIS’ as they are also known*

EIS’ are a decades-old tax planning tool regularly used by investors for a multitude of purposes. An incentive created and driven by the UK government, this well-established scheme encourages investment in early-stage growth focused companies focused on innovation.

For those who have heard of EIS’, they may know of them as high-risk investments. And it’s true, they are long-term investments in unquoted and illiquid stock. But with high risk can potentially come high reward – provided by both the significant target returns on such schemes and the generous tax incentives offered by the UK government to investors.

The tax reliefs on offer in an EIS can include:

– 30% Income Tax Relief – claimed against either your income tax liability for the current tax year or ‘carried-back’ to the previous tax year. This can be claimed against a maximum of £1M per year per investor (or £2M per year in ‘Knowledge Intensive’ companies that specialise in areas such as life sciences). But take note, you can’t claim back more than you’ve paid!

– Tax-Free Growth – any profits in an EIS are not liable to Capital Gains Tax (CGT)

– Inheritance Tax (IHT) Relief – for those more ‘seasoned’ clients who are starting to look at their IHT liability, if shares in these companies are held for a minimum of 2 years (and on death), the shares could potentially be IHT free.

– Loss Relief – an incredibly useful relief which is only available in an EIS. You would be investing in early stage companies with the ability for some fast growth, however, as they are new companies there is also the possibility that some could tank! With loss relief, if any companies in your investment portfolio do fail, you can potentially claim up to 45% back on this proportion of your investment**

– Unlimited Capital Gains Tax (CGT) Deferral – the payment of tax on a capital gain can be deferred when the gain is invested in an EIS.*** So if, for instance, you’ve sold something valuable such as a property, share portfolio, a wine collection or similar, and realised a gain in the last 3 years, you may be able to claw this CGT payment back and defer this payment for the life of the EIS investment. (Then we have some nifty tricks to chip away at this liability, potentially whittling it down to zero – speak to one of our advisers!)

And what’s in it for the government you may ask? There are some very impressive tax reliefs on offer and some will be suspicious as to why HMRC are being so generous. Investors will rightly feel uncomfortable with the thought of tax ‘evasion’ or tax ‘avoidance’ – this is neither – it is tax incentivised investing fully supported by the government and doing good for the British economy. Britain boasts an incredible variety of entrepreneurs, and EIS investment encourages and supports such innovation.

The EIS scheme was launched in the mid-90s by the government to encourage investment in early-stage companies that help to support the backbone of the UK economy. These fledging start-ups often struggle for investment and funding due to the high-risk nature of investing in a new company. However, that is precisely why the UK government offers generous tax advantages on such investments, as this reduces the financial risk for investors.

Investment in an EIS supports job creation, increases productivity and innovation, and boosts growth. So basically, for the government and HMRC – encouraging EIS investment is good business sense!

We have described the substantial returns and touched on the generous tax reliefs on offer via EIS investments, but there are specific nuances and very stringent rules that must be applied. EIS investing is a complex area and detailed knowledge is required to avoid the potential pitfalls of investing in this space. But there are many benefits, so if you think that this could be a useful tool for your situation and want to learn more, we’d love to talk to you about it!

*There are 2 other useful schemes that can be used for similar purposes – VCTs and SEIS – but in this blog we are focusing on EIS’ due to the varied and generous tax reliefs that are offered.

**relief varies according to tax bracket. 45% applies to additional rate taxpayers.

***and if you have claimed income tax relief also.

Risk warning: Tax relief depends on an individual’s circumstances and may change in the future. In addition, the availability of tax relief depends on the company invested in maintaining its qualifying status. Always seek advice from a qualified financial or tax adviser.

There are a few potential pitfalls, some of which are outlined below.

– Not claiming income tax relief. Unfortunately, not claiming income tax will mean that the gains on the EIS are then subject to CGT.

– Timing of the deployment of capital. Some EIS companies may take a year or more to deploy the capital into EIS qualifying companies, this could be an issue if income tax relief is to be carried back to the previous tax year.

– Investors can only claim back income tax they have paid! It may sound obvious but if you haven’t paid say £10,000 in income tax in the current tax year, you won’t be able to claim back more than £10,000 (but you carry back of course!).

– Exit too soon. If a company say floats on the market within the 3 year the client invested into the company then tax relief will be lost. Not always a bad thing but will depend on how much the investor will make to compensate for any lost tax relief.

– Loss of HMRC EIS approval, the companies must continue to participate in a qualifying trade for the three years following the share issue in order to maintain their EIS status.

Guy Kelland is a Chartered Financial Planner and Managing Director of Kellands Chartered Financial Planners. Guy is responsible for shaping the vision and strategy of Kellands. Previously a trader in The City, Guy founded Kellands Hale over thirty years ago.

Kellands (Hale) is a Chartered Financial Planning Practice, based in Hale, Cheshire. We give quality holistic financial planning and investment advice to both individuals and businesses in Cheshire and across the UK. Our Chartered status demonstrates our professional commitment to raising standards of knowledge, capability and ethical practice. It also helps to distinguish us from our competitors and peers. By offering a whole-of-market choice, we offer our clients the very best unbiased financial advice and ensure correct customer outcomes are achieved. Our aim is to help create, grow and protect our clients’ wealth and to work with them to formulate a financial strategy to meet their key financial goals. We have the resources to provide the research and due diligence required in-house, to deliver the very best whole-of-market investment solutions.

Kellands (Hale) Limited is authorised and regulated by the Financial Conduct Authority. The information contained therein should not be regarded as an offer or solicitation to conduct investment business and should not be viewed as personal financial advice, but instead, it is intended to provide information only as an overview of possible considerations or options.  Formal financial recommendations will be made in writing to you once the decision has been taken by you to formally appoint Kellands as your advisers and we have gained a clear understanding of your personal circumstances, needs and objectives.
Kellands (Hale) Limited (FCA Firm Reference number: 193498).

Atlas Pulse Gold Report 2021

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Following a strong summer, gold has suffered in recent months. Some say it’s because bitcoin is the new gold. It isn’t. Gold always has, and likely always will, thrive when real interest rates are falling. Bitcoin, on the other hand, responds to straight forward risk on conditions. Both are inflation-sensitive assets, so by holding both, you can have a more balanced inflation hedge.

In this piece, I look at the moves in bond yields, and how long-term inflation expectations have so far failed to come through. I believe they will, but it will take time. There are some hugely bullish scenarios for gold, such as the implementation of yield curve control. Capping long-term rates while inflation rises, would be the perfect storm.

I also discuss fund flows into gold, and how they tend to follow gold’s fair value. That highlights how recent moves have been rational, and as soon as inflation expectations come through, the gold bull market will resume.

Read the full report here.

*Charlie Morris is a founder and the chief investment officer of ByteTree Asset Management and a specialist in digital assets. He developed a gold valuation model in 2013, which has been published by the World Gold Council and the London Bullion Metals Association (LBMA). Prior to his 23-year career in fund management, Charlie was an officer in the Grenadier Guards of the British Army.

Press Room: Glint in the news!

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We’re delighted to announce that we were named on TechRound’s Fintech 50, which highlights the innovation and success of fintech companies across the world. Jason’s blog for Elite Business discussed how the banking system punishes small businesses and how SMEs are looking at alternatives such as storing capital as gold and paying staff in gold through Glint It!

GameStop was one of the biggest stories of the month and our commentary on why private investors are turning their backs on the financial system appeared in the Independent (scroll down to 14:50 as this is a live blog). This suggests that unrestricted access to information through channels such as Reddit could lead to the greater democratisation of money.

In the UK, the Bank of England’s latest monetary policy announcement kept interest rates at 0.1% but paved the way for the introduction of negative interest rates which could mean consumers have to pay banks to save. Glint’s view in the Daily Mirror and Scottish Financial News argue that this is yet another blow to savers and will further impact their purchasing power.

Tesla’s purchase of Bitcoin was another major talking point this month. Commentary from Jason appeared in the Daily ExpressMSN and Wealth Briefing suggesting that this should act as a wakeup call to banks and highlights their need to rapidly adapt to meet consumer demand. We also saw a rise in the value of Dogecoin as a result of celebrity endorsements. This sets a worrying precedent and private investors tying their financial security to a celebrity’s popular should concern us all. Our views can be seen in several articles in the Daily Express & MSN.

In a blog for Scottish Financial News, we looked at the rise of alternative global currencies as well as how and why gold and cryptos are challenging the dominance of the dollar. Jason was also interviewed by one of the Personal Finance Editors at the Mail on Sunday, one of the UK’s most well-read newspapers, discussing all things gold and money.

What’s your gold story: Ronald-Peter Stöferle

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Ronald-Peter Stöferle is managing partner of Incrementum AG, responsible for Research and Portfolio Management. He studied business administration and finance in the USA and at the Vienna University of Economics and Business Administration. On graduation, he joined the research department of Erste Group, where in 2007 he published his first In Gold We Trust report. Over the years, the In Gold We Trust report has become one a benchmark publication on gold, money, and inflation. Since 2013, he has been Reader at Vienna’s scholarium and he also speaks at Wiener Börse Akademie (the Vienna Stock Exchange Academy). In 2014, he co-authored the international bestseller “Austrian School for Investors”, and in 2019 “Die Nullzinsfalle” (The Zero Interest Rate Trap). He is an advisor for Tudor Gold Corporation and a member of the advisory board of Affinity Metals. He is also an advisor to Matterhorn Asset Management. Ronnie is married and the proud father of three daughters. He spends his spare time with his family, watching and playing football, running, and at classical concerts.

“In Austria it’s normal on birthdays or at Christmas to receive small gold coins, e.g. ducats, from your grandparents. The generation of my grandparents experienced several currency reforms and the consequences of two world wars; for them gold has a different value than for the younger generation. I owe them my initial interest in gold.

My professional fascination with gold began when I bought shares in a small junior explorer called “Osisko Exploration” on the recommendation of a friend. The stock turned into a ’40-bagger’, i.e. it increased in value by 40 times the original value. I went to my boss at the bank where I worked as an equity analyst and asked him if I could write a special report on gold. “Gold is always good, Ronnie”, he said, and that was the birth of the first In Gold we Trust report. From then on I started to study the monetary system, inflation, mining stocks and the Austrian School of Economics intensively. None of these topics are taught in schools or at university. Suddenly I saw many things from a completely different perspective.

Since then I have been writing the In Gold we Trust report for 14 issues and it has become one of the most widely read gold studies. They are usually very detailed; the 2020 report, ‘The Dawning of a Golden Decade’, is more than 350 pages long. I am fascinated by gold and everything around it and I am always discovering new approaches, ideas and perspectives”.

What’s your gold story: Michael Siperco

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Michael Siperco is the senior research analyst for global metals and mining at Velocity Trade Capital, focused on precious metal commodity commentary, thematic senior producer sector research, and coverage of emerging developers and junior producers. He joined Velocity in 2019, after 13 years in progressively senior roles at Orion Securities, then Macquarie Capital Markets Canada. He has covered all segments of the mining industry, from explorers/developers to large cap global diversified senior producers, precious, base and bulk metals, as well as royalty/streaming companies.

“I was born in Canada, but my parents immigrated from behind the Iron Curtain. That meant that from a young age I understood the power and control governments can exert over not just the big stuff, but everyday life. The arbitrary laws, policies and edicts that can change fortunes on a dime, picking winners and losers, separating the rich from the poor, the bankrupt and dependent from the prosperous and free. All in the name of whatever political ideology or economic theory is in vogue at the time.

The chaos of revolution in Eastern Europe and the fall of the Soviet Union 30 years ago put those lessons in stark terms. What people knew, what they had based their lives, their careers, their fortunes on for decades vanished with a few strokes of a pen. Entire financial systems collapsed overnight. Currencies became worthless. Laws and rules were rewritten, or downgraded to mere suggestions.

I heard stories and knew people and families whose net worth overnight became a function of how much gold jewelry, or old coins they’d managed to save. Smuggling kruggerands, sewn into the lining of their suitcases, or trading gold bracelets for apartments, land. I learned the value of gold as barter, and its power as a currency, as a store of wealth beyond the control of any government, central bank, or official exchange ratio. A fundamental building block of human economy, and a truly global unit of account when all else fails. It’s a lesson that many in North America and Western Europe have never learned, or at least never internalized.

Over the last 10-15 years, between economic crisis, changing geopolitics, and of course the global pandemic, a new, overdue, reckoning seems to have started about money and economics, about value and fiat currency. There’s no better evidence of this than gold’s climb to all-time highs, and the emergence of more alternative stores of value including, of course, bitcoin and the cryptocurrencies.

I bought my first physical gold at around $300/oz in the 1990’s, and my first mining stock not long after, in the middle of the (first) tech bubble. When I later married into an Indian family, I started to appreciate the generational transfer of wealth, not in dollars, or rupees or stocks, but gold.

I buy gold today for the same reason. Not to sell it or trade it for fiat currencies (there are plenty of other things to trade), but to hedge my bets, insure my other assets, and ultimately to pass on to my children. As a plus, no matter what other alternatives may come or go, it’s impossible to beat the look and feel of a newly minted gold maple leaf in your hand”.

Something for the Weekend: A Visit to the Temple of Golden Pavilion (Kin-kakuji, Kyoto, Japan)

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There’s not much tourism to Japan right now, thanks to Covid-19.

But that means there’s rarely been a better time to visit Kin-kakuji, the Golden Pavilion Zen temple in northern Kyoto, Japan, the top two floors of which are completely covered in gold leaf. Avoid the selfie-snapping hordes and see this temple in peace and quiet.

The temple overlooks a lake and is just completing a renovation, which should mean it is a feast for the eyes. Kin-kakuji became a World Heritage site in 1994. If you are visiting Japan it’s a must-see destination. It rivals the Golden Temple of Amritsar in India or the Shwedagon Pagoda (the ‘Golden Dragon’ Pagoda) in Yangon, Myanmar.

Yoshimitsu Ashikaga (1358-1408), became the third Shogun (a hereditary commander-in-chief in feudal Japan and the real ruler of the country) at the age of 10 in and set up his government in 1378 in Kyoto.

As a demonstration of his wealth and power Yoshimitsu rebuilt the temple in 1397 and lavished its exterior with 20 kilos of gold and re-named it Kin-kakuji. The gold leaf comes from the Japanese city of Kanazawa; it’s made by beating a small piece of gold, about the size of a dime, into a leaf that stretches to 1.62 square metres. In Japan, gold is historically associated with good fortune, good health, and keeping evil away. You can even buy a gold-leaf topped ice cream.

Kin-kakuji was burned down by an angry monk in 1950, but restored in 1955; that conflagration became the setting for the Japanese author Yukio Mishima’s novel The Temple of the Golden Pavilion.

Nowadays, Kin-kakuji is a tourist fixture for its spectacular appearance and its gorgeous setting, surrounded by the trees and next to the lake. Perfect for a spot of Zen meditation, while you ponder what souvenir to buy with your Glint card.