Share your saving strategy!
Anyone else from the UK here?
I ask because we have Gold and Silver legal tender coins here that are exempt from Capital Gains Tax (CGT), which makes saving in coins very attractive.
If you consider that Gold holds its purchasing power as local currencies lose theirs, then in order for your Gold to rise in price, your local currency must have lost purchasing power (unless you're riding inside a Gold bubble).
So, say for example you have around £10,000 in Gold measured in today's local currency, and the currency falls in purchasing power by 50%, your Gold is now worth around £20,000 in local currency (it takes twice as much currency to buy the same amount of Gold). Hooray, you say, but the price of other goods has likely risen too, so you've only really managed to preserve 100% of your purchasing power relative to things you need to buy. You haven't gained anything, you've simply protected. Okay, but that's still good...
However, the government will see the currency difference of £10,000 as a capital gain, and tax you accordingly (up to 28%).
So, whilst you haven't lost as badly as those who didn't save in Gold, you have been punished for making a currency gain even though you haven't actually increased your wealth at all! You will have actually lost a little as a result of being taxed. Seems rather unfair, right?
Now, if you save in legal tender Gold/Silver coins, you don't get taxed for capital gains.
What to do?
Obviously BitGold's strength is in its liquidity, but if it's possible to save incrementally with BitGold, and then withdraw currency to purchase sets of legal tender coins at regular intervals, isn't that the smartest move for long term preservation of wealth?
Would love to hear your thoughts!