Can the Government Take My Gold?
Although rare, governments have confiscated gold in the past; most notably under Executive Order 6102 issued in 1933.
Since then, most countries have moved away from the gold standard and no longer need physical gold bullion as part of their currency backing system. Still, your bullion could be confiscated during an economic crisis by your government.
Storage Options
As an investor in physical bullion, proper storage is of utmost importance. Your options for keeping gold include keeping it at home, bank safe deposit box or private vault provider – each comes with their own set of advantages and disadvantages.
At-home storage poses an increased risk of theft. To ensure its protection from being stolen, store gold in a manner which no one else can gain access to it–a fake cookie jar or locked cabinet are two excellent solutions. Furthermore, keeping gold stored at home may incur more in terms of insurance premiums and protective equipment costs than leaving it safely in an external vault.
Bank safety deposit boxes offer maximum protection, yet lack the accessibility and qualify for FDIC insurance coverage. Private vaults on the other hand tend to be more affordable while offering advanced features like fingerprint scanners and 24-hour surveillance. When selecting a vault provider it is crucial that research be conducted thoroughly – the ideal companies will have an established history, large customer base and transparent policies that you can rely on.
Taxes
Gold stored abroad is very unlikely to be confiscated by any government, although this could happen in an extreme financial emergency where government authorities need your gold as part of an emergency currency revaluation or as insurance against currency collapse. Governments tend to only call in gold when there are extreme financial strains.
However, even if the government seizes your gold in such an instance, they are likely to focus on domestic assets rather than foreign holdings in order to save face and not cause panic in the country.
Be mindful that when selling gold investments, capital gains taxes will apply when selling. This is because the IRS classifies precious metals as collectibles. Your taxes would depend on how much your metals were sold for relative to their original cost basis – for instance if purchased in India they currently sell for 10% + 5% AIDC + GST then 18% would be due as taxes when selling.
Legality
Many precious metals enthusiasts keep their investments close to home, believing the government won’t try and confiscate their gold investments. Unfortunately, however, this belief could not be further from reality. First of all, gold bullion trades on an international scale making it more challenging for governments to target foreign holdings easily; therefore, should the US government want to seize any gold, targeting domestic holdings would likely prove easier as people in that nation will likely take less legal action against it than foreign holdings would do so easily.
Telemarketers often promote imported European coins such as British Sovereigns, Belgian Twenty Francs and Dutch 10 Guilders by suggesting they are non-reportable since transactions of $10,000 or more do not require reporting in the US. While such claims might appear plausible in theory, in practice governments could seize such gold, further undermining faith in its currency and economic system in doing so.
Security
Some individuals have taken extreme measures to conceal their gold, such as placing it inside an old book or fake rock. Although these methods provide temporary peace of mind, criminals will quickly check such obvious hiding spots before taking away your valuable metals.
Security at a depository should also be an issue when choosing a location to store items. When choosing one, look for transparent record-keeping practices and regular audits from independent firms; additionally, online access should be available and personal visits permitted as necessary.
Although it’s possible that governments could seize your gold in the future, this scenario is highly unlikely due to numerous reasons. First and foremost, since 1933 the global monetary system has undergone dramatic change: most countries have abandoned gold as their official reserve currency and adopted fiat currencies backed by nothing physical; most governments also prioritize civil liberties and property rights over seizing private gold for political expedience reasons – seizing private gold would likely cause massive outrage that wouldn’t be politically feasible either way.
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