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BULLION & BOND

ISSUE 04 OCTOBER / 2013

The Bullion Bulletin The real journal

OLDTIMER Exclusive interview with Michael Frölich about „gold in the garage“ – the Old-timers as finance project

FURTHERMORE: Gold and taxes, Part 1 ECB cuts interest rates The big Gold Game

Gold in the garage The secure investment or just alibi-financing for fans?

Gold and taxes The tax-advantages of

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ld-timers as finance project – a calculable investment or finance project for real experts? The exclusive Bullion & Bond interview with well-known and nationwide popular Oldtimer retailer Michael Fröhlich about the facets of investment in old automobiles. „Old-timers are in fashion,“ says Fröhlich. Nevertheless he emphasises the influence of pure excitement about the object as major even if motivation for purchase differs. Just as with other investments one should be completely aware of the targets. This means: is one ready to face the high risks and purchase speculatively interesting automobile to sell it as soon as possible with the possibly

highest profit or to invest ones assets on the longterm. As example Frölich mentions the historical race cars especially if they’ve triumphed driven by some prominent driver – those are real hits.

the gold investments, Part 1

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One could generate millions on the auction. But – those are real Babes and are quite rare. Otherwise interesting are Old-timers with capital growth, as, currently, e.g., Mercedes SL Series.

s long as there is no wealth or precious metal tax or gold-tax, the private gold-purchaser doesn’t have to consider taxation purchasing and selling the physical gold. However there is one exception – if the profit from this so called private realisable deal - private purchase and selling is made within one year.

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No tax return

The Mercedes SL series are currently experiencing capital growth

About Michael Fröhlich Michael Fröhlich is passionate Old-timer dealer, constructor and artist. The Enfant Terrible of the Oldtimer scene he operates the agency “Fantastische Fahrzeuge” (fantastic automobiles) in Dusseldorf. Additionally he is the constructor of the sport car “PG Elektrus” and initiator of an unique Old-timer sculpture-park in Neandertal in Mettmann. More information under http://home.mobile.de/ michael-froehlich

Gold bars, gold jewellery and gold coins are physical objects of value and attract no interest. Consequently there is no income tax and no income-related expenses on the tax return. The profit from the sales of the precious metals as e.g. gold is not subject to the flat rate withholding tax. If gold is sold with profit after speculation period of one year, this profit is not subject to the income tax according to the § 23 Income Tax Act (Einkommensteuergesetz – EstG). Whereas the “hardware-gold” is sold within the speculation period and with profit, the profit is not subject to the flat rate withholding tax (25%) but to normal private tax rate. Continue on page 2


The tax-advantages of the gold investments, Part 1 Turnover tax-exempt The gold coins or gold bars purchase and sales are tax-free in terms of VAT resp. turnover tax as long as those are qualified as investment gold according to the § 25c art. 2 of Value Added Tax Act (Umsatzsteuergesetzt – UstG). The criteria are as follows: Gold bars with the weight according to the gold market and fineness of at least 995 thousandth part. Gold coins with fineness of at least 900 thousandth part mint after 1800, which were or still are accepted as currency in its country of origin. While purchasing gold the acquirer has to consider additional public fees on the gold price. However the purchase price in the professional trade is always higher than the sales price. Normally in the professional trade the requirements for the turnover tax-exempt are met. The price for the gold transaction are mostly results of the trade margin. More information under: http://www.bullion-bond.com

The big Gold - Game The Bullion Bulletin draws lots: six gold bars with the value of 5000 CHF every week! Sensationally! Participate now and get the chance to win one of six gold bars - for twenty weeks! The total value amounts to more than 100.000 CHF! Moreover, as a first prize we draw lots among all participants - a 5-day-trip to the famous hotel Beau Rivage at Lake Geneva, incl. flight and pocket money in amount of 10.000 CHF. The participation is non-binding and free of charge. Simply complete the participation form following the link below - and you already participating at The big Gold-Game of The Bullion Bulletin. You will find more information at: http://tresor.bullion-bulletin.com

Gold in the garage Resumption from page 1

The SLS Pagode 230, 250 or 280SL are to be highlighted for already today they are classics. In good condition one can gain 70.000 EUR – and the vehicle had cost 40.000 EUR only 5 years ago. This makes good outlooks for the investor. But – what looks like fantastic return is actually based on some certain qualifications. The expert determines that authenticity is the most important requirement for Old-timers. Which means – the original vehicles are required, those who have no spare parts – but if this is true one will buy even bit of patina. “The authenticity is more important than best possible restoration works. This trend is in fashion” tells Fröhlich. And one more phenomenon that even the expert cannot really explain: “I have just sold a Jaguar to Mexico. One will not believe this but they see it as additional value if the vehicle is from Germany. From Switzerland with german papers can also be the case. But preferably the vehicle should have german MOT. It is some kind of quality seal today.” For people who are four-wheels-fans the “gold in the garage” is kind of investment as well – inclusive enjoyment. For others this is more costly undertaking.

ECB cuts interest rates

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bombshell from European Central Bank – the president Mario Draghi and the majority of the board members made the decision to intensify the cheap-money-politics: cutting the ECB-interest rates record deep has triggered fireworks on the stock markets. The analysts had little confidence that ECB will cut the interest rates for the inflation rate in October has decreased rapidly. Though the descent is mainly due to fallen petroleum prices and moderated food prices. This seemingly theoretical decision has huge influence over human everyday life. Already in short space of time they are going to have hardly any interest on their savings books, fixed deposits or call money. “Lower interest rates lead to long-term losses by savers which quasi matches the expropriation” cautions Georg Fahrenschon, the president of the German Savings Banks Association. Max Herbst, the founder of the FMH Finanzberatung: “It is pretty much the same whether I deposit my money at the bank or leave it home”. Some savings banks already offered call money interest rates of 0,1%. The financial institutions are not bound to the private savers money due to the cheap-moneypolitics and don’t have to attract them with tempting savings deposits interests. The consumers who don’t have to draw on their assets immediately have to invest in real estate or gold, so the experts. Source: Frankfurter Allgemeine Zeitung, Tagesschau

Base rate development - base rate % 2007

2008

2009

2010

2011

2012

2013

6,00 Great Britain

5,00

Base interest rate

0,50 0,25

4,00 United States 3,00

Federal Funds Rate

2,00 1,00

0,25

EUR-area

Main refinancing rate

0,10

Japan

Bank call rate

0,00 Source: Bank of England, European Central Bank, Federal Reserve, Bank of Japan

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The Bullion Bulletin October 2013 EN