How to Buy Loco Zurich VAT-Free Silver & Platinum Bullion
Synopsis
If you're seeking an alternative method to invest in silver and platinum from the UK and Ireland, without concerns about value-added tax (VAT) imposed on silver and platinum bullion, you've come to the right place. For many novice investors in precious metals, VAT poses a significant barrier to entry, especially for those who aim to start investing in silver and platinum due to their much lower price per ounce compared to gold.
In this detailed guide, we delve into the ins and outs of purchasing VAT-free silver & platinum bullion. Uncovering the advantages of this investment approach to guiding you through the purchasing process, we provide you with the necessary knowledge and insights.
Introduction
The quick answer to your question is 'Loco Zurich.' No, it doesn't refer to the 'Crazy City of Switzerland.' However, you would be crazy not to know about this, as it could help you maximise profits for your precious metal portfolios in the years to come if the price of precious metals continues to increase.
To help you understand what 'Loco Zurich' means, we will look at definitions provided by reputable sources and break down the terms to understand their meanings and why you should consider using our vaulted storage overseas service for your physical silver and platinum in Zurich, Switzerland to avoid paying VAT.
Similarly, 'Loco London' is another term, used like 'Loco Zurich,' but instead of the metal being stored or traded in Switzerland, it is stored in London. Loco London is also associated with the London Bullion Market Association (LBMA), an international trade association specialising in over-the-counter (OTC) trading for gold and silver bullion.
Currently, LBMA refiners oversee the annual production of 5,000 tonnes of gold and 30,000 tonnes of silver via OTC trading. Around $25 billion USD worth of gold transactions are finalised daily within the global OTC market, with London acting as its primary hub.
Definition of Loco Zurich
Loco: Loco is the short abbreviation for location.
Zurich: Zurich is a city in Switzerland.
Loco Zurich means in respect of an account holding Bullion, the custody, trading or clearing of such Bullion in Zurich, Switzerland (See Source)
LBMA Definition
Loco Zurich is simply a metal trade where the metal part of the transaction settles over accounts held in Zurich. (See Source)
What Does This Mean?
The term 'Loco Zurich' is the storage of your bullion in a secure vault situated in Zurich, Switzerland. This arrangement exempts you from VAT obligations, resulting in a higher quantity of metal for your investment. VAT charges would apply only in the event of a future delivery request for your investments.
However, our Loco Zurich range is only intended to be sold as a 'storage-only' item and is not a cost-effective option should you ever wish to take delivery. Costs to take delivery or collect will include handling fees, customs clearance charges, and even tax liabilities.
What is Value Added Tax (VAT)?
European Union Definition: VAT is a general, broadly based consumption tax assessed on the value added to goods and services. (See Source)
This consumption tax was regulated by Brussels, until the UK formally withdrew from the EU in January 2021. The UK standard VAT rate is currently 20%, which has been the case since the rise from 17.5% in January 2011. You can work out how much tax you are paying by dividing the sales amount by a value of 6. This means for every £100 you spend you are paying £16.66 in tax, which is quite a significant amount.
Some products such as milk, books, children’s clothes and take away food carry no tax and are classified as zero rated. Newspapers are zero rated (note their digital counterparts are taxable), maps are zero rated and energy supplies are usually 5%.
More relevant here is that gold has been exempt from VAT since January 1st 2000 but silver, platinum and palladium have remained subject to the standard rate. This makes gold a much better investment if your funds allow but that's not to say silver (at the right time) doesn't make a great investment. If you believe the price of silver to be low you can offset the VAT amount when selling at the higher price.
Why Invest in London Good Delivery VAT-Free Silver Bars
In Q1 of 2024, and continuing into Q2, silver saw an increase in total value per ounce, rising by more than 25% in Great British Pounds (GBP). The price fluctuated between a 3-month low of approximately £17.24 and a high of £23.93. During this period, silver reached its highest point since the highs of 2011 when it saw an All-Time High (ATH) of £29.29 per ounce.
Figure 1 - Silver Price Last 3 Months per Ounce (GBP) (15/01/2024 - 15-04/2024)
Each VAT-free silver bullion good delivery bar contains, on average, 1000 ounces of silver. Consequently, if you had invested in one of these bars just 3 months ago, following the 25% increase per ounce of silver in GBP during 2024 Q1 & start of Q2, you would have made £6,600+ if you sold it during this time period, before considering the premium which you purchased it and factoring that into the total profit earned. As mentioned earlier in the article, we would never recommend taking delivery of these products.
1000 oz Silver VAT-Free Good Delivery Bar - Loco Zurich Storage
These investment-grade Silver Bullion Good Delivery Bars are London Bullion Market Association (LBMA) approved 1000 oz silver bars selected from a variety of LBMA-approved refiners, containing approximately 31.1 kilograms of pure, 999 fine silver.
It's important to note that London Good Delivery silver bars can weigh between 750 troy ounces (23 kilograms) and 1,100 troy ounces (34 kilograms). However these bars contain approximately (between 930 and 1,080 troy ounces). You will only pay for the exact metal weight of the ordered bar, plus the premium.
CGT Exempt & No VAT
We have an excellent range of products that are capital gains tax exempt, including all coins classified as British legal currency.
VAT Free Silver 1 oz CGT Exempt Coins - Loco Zurich
These VAT-free British 1 oz silver coins will be chosen on an 'our choice' basis, which may include Britannias or Royal Mint lunar coins. All will contain one ounce of fine silver, struck in .999 fineness.
| Quantity | Premium | Total | Total |
|---|---|---|---|
| 1 | £5.65 | £29.14 Price Per Item: £29.14 Est UK Delivery £3.50 | |
| 5 | £5.40 | £144.45 Price Per Item: £28.89 Est UK Delivery £6.00 | |
| 10 | £5.30 | £287.90 Price Per Item: £28.79 Est UK Delivery £6.00 | |
| 25 | £5.20 | £717.25 Price Per Item: £28.69 Est UK Delivery £6.00 | |
| 50 | £5.00 | £1,424.50 Price Per Item: £28.49 Est UK Delivery £11.00 | |
| 100 | £4.90 | £2,839.00 Price Per Item: £28.39 Est UK Delivery £27.60 | |
| 250 | £4.50 | £6,997.50 Price Per Item: £27.99 Est UK Delivery £30.60 | |
| 500 | £4.40 | £13,945.00 Price Per Item: £27.89 Est UK Delivery £50.20 | |
| 1000 | £4.30 | £27,790.00 Price Per Item: £27.79 Est UK Delivery £100.40 | |
| 2000+ | £4.00 | £54,980.00 Price Per Item: £27.49 Est UK Delivery £186.20 |
Buying VAT Free Silver Coins For Delivery
Before we left the European Union, it was possible to buy VAT free silver and have it shipped to the UK. As a part of the EU, VAT could be paid in the country of purchase which could sometimes be at a lower rate than the UK’s 20% (please correct us if we are not 100% accurate as we like to keep our pages up to date):
| Country | VAT Rate / GST | Country | VAT Rate / GST |
| Austria | 20% | Luxembourg | 17% |
| Belgium | 21% | Netherlands | 21% |
| Denmark | 25% | Spain | 21% |
| France | 20% | United Kingdom | 20% |
| Germany | 19% | Estonia | 22% |
| Italy | 22% | United States | 0% |
| Ireland | 23% | Canada | 5% |
| Sweden | 25% | Russia | 20% |
| Australia | 10% | New Zealand | 15% |
| Norway | 25% | Switzerland | 8.10% |
Benefits of Investing in Loco Zurich VAT-Free Bullion
Swiss storage facilities are well-known for their outstanding security and confidentiality benefits, capitalising on Switzerland's stable political environment and strong legal system. With strict privacy regulations and a history of banking confidentiality, these facilities prioritise privacy and protect valuable assets and sensitive data.
These particular coins and bars are held in secured bonded storage in Zurich, which allows investors to avoid the 20% VAT charge. We do charge minimal storage fees on these Loco Zurich products, but this is still considerably cheaper than having them delivered.
Buy "VAT-Free" or "Marginal VAT" Silver Online
The UK has a special margin scheme for secondary market silver where you only pay VAT on the profit you make when you come to sell.
This means if we sell a silver coin for £20 that we have previously bought for £15, we would only pay VAT (at 16.67%) on the £5 profit or 83p. Likewise if you were to sell the coin onward for £30, you would then pay VAT on you £10 profit which at 16.67% is £1.67.
Conclusion
In conclusion, for investors seeking an alternative route to invest in silver and platinum without encountering the value-added tax (VAT) applied to silver and platinum bullion, the option of Loco Zurich storage provides a strategic solution.
By delving into VAT-free silver and platinum bullion purchases, understanding their advantages, and navigating the purchasing process, you can access a pathway to enhance your precious metal portfolios while mitigating tax implications.
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