The IRD recently released a statement on its view on whether proceeds from the sale of gold and silver are taxable. The Commissioner’s view is that gold bullion bought as an investment will necessarily be acquired for the purposes of disposal. Consequently, any amounts derived on its disposal will be income. The Commissioner considers that the very nature of the asset leads to the conclusion that it was acquired for the purposes of ultimately disposing of it.
Central to the IRD’s view is that gold and silver as a commodity do not provide annual returns of income while being held. They have no use or value in other terms like for instance art where they have an aesthetic value. Such investments are therefore considered to have been acquired for the purpose of disposal, so the proceeds are considered by the IRD to be taxable under section CP 4 of the Income Tax Act 2007.
While there is logic to the IRD’s view, in a world of negative interest rates, it could be argued that perhaps gold does offer a return because it holds its capital value.

If you would like to discuss the possible impact for you – please contact Nigel Smith