“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.