Cyber-attacks and political fears see GP bury £100k of gold in his garden
Simon, who lives in the Yorkshire Dales* bought gold for the first time this year, after carrying out research and waiting for an optimal price point for entry.
He says there were a number of reasons why he turned to gold now. The cash he had sitting in the bank was earning 0.1% and was “slowly becoming worthless”.
Another bugbear came from the geopolitical climate which he says seems “potentially unstable”. Given the uncertainty of Brexit and the effect this could have on global markets, such as if other countries like Italy follow suit, this could threaten other investments Simon holds.
“With a risk of institutional collapse in the banking sector, I saw little point in taking that risk with my life savings or my children’s inheritance for the 0.1% interest I was receiving. When Lloyds fell victim to a cyber-attack this was the final straw for me. We are living in a digital age where the threat of being wiped out for reasons that I cannot comprehend make me want some control over my wealth,” he says.
As such, he maintains that physical gold is a trusted ‘currency’ all over the world and has stood the test of time for thousands of years.
“I know if I need to I can liquidate at any point but at least while the market is as murky as it is – I have control over my wealth. I’ve also purchased a small amount of stock in a couple of gold mines that are just getting going. I understand there’s more risk with these assets but potentially the gains could be larger,” he adds.
Balancing the risk
Perhaps Simon’s risk threshold is tuned higher as he “dabbles” in stocks with an emphasis on technology both in established and emerging markets, as well Blockchain – the technology behind cryptocurrencies – which are “key to a sound investment”, he says, as well as a few Alt coins.
As such, he wants to balance these higher risk investments with holdings of physical gold to provide a hedge to his equity and cryptocurrency portfolio.
Further, by holding gold coins rather than bullion, it’s tax-free gold. “I decided on coins to avoid any potential Capital Gains Tax, should I need to sell some in the future… assuming gold appreciates in value that is,” he says.
The Pure Gold Company explains the tax treatment is different whether investors hold coins or bars.
If you make a gain on an investment, you’re liable to pay Capital Gains Tax. But if you’re a UK residents and you hold gold coins such as Sovereigns or Britannia, any gain you make is free from tax.
This is because UK coins are seen as legal tender and in the UK the government or HMRC cannot tax the flow of currency.
Simon was in a fortunate position in that he could buy gold coins via The Pure Gold Company with cash savings.
Simon, in his 60s, says his decision to bury his £100,000 of gold coins in his back garden rather than have it stored in a vault was partly due to the ‘novelty factor’, but also for easy access.
He says: “I know the gold is safe, and I can get at it anytime. I had to choose a spot where no one would think to look, or someone might stray upon with a metal detector.
“It was hard work digging the hole given just how dry the ground is this summer. But, it gave me a good excuse for a cold beer though.”
The pensioner sketched a “good, old-fashioned treasure map” after watching too many Pirates of the Caribbean films. A copy of the map has been sent to his solicitor for safe-keeping.
“Hopefully our children will have a nice surprise one day. But if we move, then it’s a good excuse to have another cold beer when we dig it up and bury it again,” he says.
*Name and location changed to protect identity