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29/07/2021

Considering tax, is buying silver abroad a good investment? Liam Croke lets you know

Considering tax, is buying silver abroad a good investment? Liam Croke lets you know

Silver production is set to decrease, but demand is going to increase, says Liam

Q - My son is returning from college in Singapore for Christmas and is considering buying a bar of silver there and bringing it back with him as an investment. I have a couple of questions: Is silver a good investment? Will he have to pay any taxes/customs duties, if he carries it back himself in hand luggage? All advice welcome. 

A  - Investors like silver for a couple of reasons. Whenever there are times of political or economic volatility, the value of metals like silver, gold and platinum increase in value, as a hedge against equities and markets. 

Secondly, the production of silver production looks set to decrease, but the demand for it will continue to grow, which should see its value increase in the years ahead.

In the past year, an ounce of silver went from $14.54 to $16.89 which is where it's trading about now. So, in the past 12 months, it has increased in value by +16% which you would think is excellent, and it would be if the purchase of silver wasn’t subject to VAT at 23%.

So, to answer your second question, yes, your son when declaring the silver on his return to Ireland will have to pay VAT.

And when you factor in the VAT rate, effectively the value of silver has to increase by that amount for your son to break even, and only anything above that will be a profit.

So, I don’t think he’ll be able to turn around a profit very quickly, and there are no guarantees with buying silver anyway, but I think it's certainly worth buying a bar, and if he holds on to it for the long term, he should do fine. 

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