Old coins – personal use asset exclusion
15 October 2014
Posted by: Author: SAIT Technical
Author: SAIT Technical
heard from various clients, that there is apparently a clause that excludes
gold coins minted in the 1800’s from capital gains tax. I was unable to confirm
this statement made by some of my clients. Will you be able let me know if
there is any truth to this claim.
definition of an 'asset' in paragraph 1 of the Eighth Schedule includes ‘any
coin made mainly from gold or platinum’. It would be the definition of
‘currency’ that would exclude an old coin or note no longer in
circulation. It would therefore not be currency. It follows that
notes or coins held as collectors’ items are assets for CGT purposes.
However, such collectors’ items if held by an individual constitute
personal-use assets under paragraph 53(2), and any gain or loss on their
disposal must be disregarded [paragraph 53(1)].
A ‘personal use asset’ does not
include a coin made mainly from gold or platinum of which the market value is
mainly attributable to the material from which it is minted or cast – see
paragraph 53(2) in the Eighth Schedule and paragraph 126.96.36.199 in SARS’s capital
gains guide. SARS explains it as follows:
"A number of assets used for
non-trade purposes are, however, excluded as personal-use assets under para
53(3), for example, gold or platinum coins (other than collectors’ items)…”
Nothing in this query and answer should be construed as
constituting tax advice or a tax opinion. An expert should be consulted for
advice based on the facts and circumstances of each transaction/case. Even
though great care has been taken to ensure the accuracy of the answer, SAIT do
not accept any responsibility for consequences of decisions taken based on this
query and answer. It remains your own responsibility to consult the relevant
primary resources when taking a decision.