Silver Investment

Silver has almost always been considered a recognisable store of wealth, evolving to its current status as the most exciting commodity in which to invest. Whilst pure silver is rarely used as currency now, there is the odd exception. The US state of Utah, for example, still accepts silver as legal tender, to be used in the payment of ‘all debts’!

However, these days, it is more commonly used as a traditional commodity and as a natural resource, which can be used in various applications. Around 40% of silver is used for various industrial purposes. Due to its antibacterial properties, the use of silver in medical and cosmetic applications has also grown in recent years.

Like other commodities, the key driver of the silver price is the ever-changing relationship between supply and demand. Unlike gold, however, the volume held on the planet, and available to purchase, is generally accepted to be diminishing.

This is due to the fact that numerous industrial applications of silver, including photographic supplies, can only use the silver involved once. Coupled with the increasing industrial use of silver, the situation creates a landscape in which silver demand will grow, whilst supply diminishes.

As a result, silver investing is widely acknowledged as one with an almost guaranteed profit projection.

Unlike gold, silver investing is not inherently Capital Gains Tax (CGT) or VAT free. However, through a properly structured purchase, it is possible to invest without incurring undue taxation.

Buying Britannia silver coins, for example, avoids CGT as they’re classed as legal tender. And due to our purchasing policy, which takes legal advantage of EU tax laws via our unique and exclusive sources, there is also no UK VAT to pay. Our silver bars, when purchased and stored through us, are held offshore in the Channel Islands, making them exempt from the 20% VAT charge.

Learn more about how you can be tax efficient while investing with our ‘All you need to know’ VAT guide.

Silver offers many alternative benefits to gold. Whilst providing a hedge to paper assets, it also provides further diversification if you already own gold.

A silver investment is far more affordable than gold, which makes it a more accessible option as a valuable hedge. Traditionally silver has been around 15 times cheaper than gold but the gap between the two has widened dramatically in recent years, prompting many experts to predict a far greater profit potential than gold.

Here’s the exciting part…

Increases in silver price are expected to take place due to the increased demand for silver globally, primarily due to industrial demand. The electric car industry, the solar energy industry, and electronics component manufacturers all use silver heavily in their operations.

On the other hand, silver is becoming increasingly scarce and production levels are dropping globally. For example, Peru, a leading producer of silver globally, has published warnings that their production levels have dropped significantly. The governments state that supply has dropped significantly in Cajamarca, the largest producing region in the country. The government report states that the output of from mines has dropped as much as 12%. This is likely to have a significant impact on the silver spot price and we are soon likely to witness a steady increase in silver prices. Therefore, now looks like a good time to invest in silver and hold on to the investments over the long term to gain from the price differential. As discussed earlier, with the gold-silver price parity at 85:1, silver is a great buy without having to invest a lot of money. There are plenty of options as well from VAT free silver bars to silver bullion, as well as valuable collectable coins of numismatic interest.

Overall, the relative low-level price point, opportunity for profit and further diversification of your investment portfolio make silver worth investing in. The buying options give investors a good choice in liquidity and can be very divisible should you need to.

You can download our guide to ‘Investing in Gold and Silver’ to find out more about the benefits of diversifying your portfolio to include physical precious metals. At Physical Gold, our investment experts as silver dealers specialise in advising clients just like you on how to invest in precious metals. Our silver investment experts can guide you on how to buy silver and where you can get the best deals, this is the role of silver dealers. It’s also worth knowing more about buying silver bullion if you’re just interested in buying and holding silver investments. On the other hand, if you’re interested in buying collectable coins that have numismatist value, that’s an entirely different subject. In addition to the guide we spoke about earlier, the ‘insights’ section on our website has a great knowledge base, with a number of articles, including our FAQs. Also, visit our silver shop to understand the product ranges available.

Individual purchase or sales

In much the same way as gold, you can invest in silver in a variety of forms including coins or bars. Both types offer a range of denominations and you can add to your silver investment portfolio from as little as £100 with our range of silver coins. Our silver shop stocks a good range of collectable, limited edition, rare and foreign silver coins. And with the benefits of some coins being exempt from capital gains taxes, there is even more incentive for silver investing.

Buying VAT Free Silver Coins

While silver coins attract 20% VAT in the UK if delivery is taken, we’ve come up with an exclusive silver coins dealers UK solution to save you that tax burden and improve the value of your silver investment. Due to all the silver coins we offer having a face value, and the fact that we ensure our supply chain triggers the EU tax treaty, we can now deliver silver coins to your door without charging VAT.

So which coins qualify?

In order to meet the requirements, we cannot offer silver rounds as they fail to meet the criteria of having a face value. The good news is that the coins which do qualify are all produced by the world’s top manufacturers including The Royal Mint, US Mint and Austrian Mint. We offer a range of silver coins to meet various objectives and requirements. For pure outright price, the Silver Britannia and Austrian Philharmonic are unbeatable as they’re mass produced for the lowest possible cost. For those seeking limited edition coins, we provide access to fantastic Royal Mint issues such as the Lunar and Queen’s Beasts Series. These are a little more to purchase, but to their collectability, relative rarity and global desirability, will no doubt rise in value quicker and command a premium in the future. We also cater for the need to have different size coins in a portfolio. Coins vary between 1oz, 2oz, 10oz and huge 1kg varieties!

What are the other benefits of the coins?

Apart from the incredible VAT saving, purchasing any of the British coins (from the Royal Mint) also means you won’t pay any tax upon sale. As legal tender in the UK, British residents cannot be taxed on the sale of legal currency, so all these coins enjoy Capital Gains Tax free status.

With the future impossible to predict, especially with volatile and complex markets, the ability to liquidate part of your silver investment portfolio at any time is a huge advantage. By their very nature, the coins are smaller than silver bars, providing the investor with many pieces rather than one or two huge bars of silver. This means a handful of coins can be sold if needed rather than having to sell ‘all or nothing’. With the coins being very desirable, it’s incredibly easy to sell your silver so you can be assured of liquidity whenever you need.

Buying VAT Free Silver Bars

However, the relative value of silver coins vs silver bars is better in bar form as coins attract a greater premium due to their high production costs. Investors looking to gain the most profit and appreciation from their silver will be able to purchase a greater quantity in bar form than the equivalent cost of buying coins.

Silver Bars for storage offshore

Silver bars don’t have a face value so storing your bars offshore is a method we offer to own in bulk without paying the 20% VAT.

The minimum purchase price for our silver bar product offering is currently £5,000 and is made up of various sizes of the bar from 100oz to 1kg depending on the prevailing market prices. This solution appeals to those seeking to buy at low prices in larger quantity. It also provides the ease and peace of mind that your silver investment is stored and insured in professional vaults.

Now you can take delivery of silver bars VAT-Free

In the same way that customers like to purchase our VAT-Free silver coins and receive them at home to touch and feel, many enquired whether we could offer the same service for silver bars. As usual, you didn’t want to be defeated by rules, so as silver bar dealers came up with another solution! We’ve now sourced silver bars with a face value too! We like to call this range of bars ‘coin bars’ as they enjoy some characteristics of both silver formats. We sell VAT-Free silver bars for delivery in 4 different sizes to suit your needs. Just like our VAT-Free coins, we ensure these special bars are sourced so that VAT isn’t applicable.

Once you’ve decided on the amount and type of silver you wish to buy, we can be delivered to your door, or hold in our secure facility on your behalf. This option is the preferred choice for many of our clients as the size of bullion you get for your money is greater than the equivalent in gold. Our LBMA facilities are fully insured by Lloyds of London and also provides a guarantee as to the provenance of your investment when it comes to resale. Secure and safe storage can also avoid accidental damage to the condition of your silver investment which can also affect the resale value.

As silver bar dealers we believe it’s important that there’s no commission on silver purchases and we provide a buyback guarantee. To find out more about your options for tax-free and VAT free silver, visit our dedicated silver investing page.