Investments in Gold – Chapter 9: Allocated Accounts

This is chapter number 9 out of 15. Read the rest:

Read Investments in Gold – Chapter 1: Introduction
Read Investments in Gold – Chapter 2: Advantages of investing in Gold
Read Investments in Gold – Chapter 3: Disadvantages of investing in Gold
Read Investments in Gold – Chapter 4: Guidelines for Investing in Gold
Read Investments in Gold – Chapter 5: Investments in Physical Gold
Read Investments in Gold – Chapter 6: Bullion Bars and Coins
Read Investments in Gold – Chapter 7: Numismatic and Semi-Numismatic Gold Coins
Read Investments in Gold – Chapter 8: Gold Certificates

Allocated gold accounts are individual’s accounts at a bank or depositary which permits a bullion brokerage firm to transfer or ship bullions to. These accounts entails ownership of specific gold holdings to which the owner holds the title for the individual gold bars or coins. As allocated accounts involves ownership and legal title, it is essential that you conduct due diligence on the providers of allocated gold accounts. Their credit ratings, reputations, history, net worth and security are some of the factors which you need to examine before opening such an account with the providers.

SIPPs and Gold Bullions

Since April 2006, UK citizens are able to invest in gold through Self-Invested Personal Pensions (SIPPs). US citizens on the other hand can do so with the Individual Retirement Accounts (IRA’s). SIPPs are personal pension scheme holds your investments until you begin to draw a pension at your retirement. This pension scheme is meant for those who wish to fund their retirement by managing their own investments. They can choose which asset classes to invest in from the list approved investments by Her Majesty Revenue & Customs. For investment in gold bullions, tax relief is given as a form of “top up”. This means individuals, depending on their income bracket, are permitted to claim up to 40% in income tax relief from income derived from investments in gold bullions.

The Gold bullions allowed in a SIPPs scheme must be of investment grade gold. This means the gold in question must have a purity of not less than 99.5% or .995. The gold must immoveable and be in the form of a bar or wafer of a weight traded on the bullion markets. Furthermore investors investing through the SIPPs scheme are not permitted to take possession of the gold. They must be stored at a secured third party like a depositary or bank. As such investments in allocated gold accounts, gold certificates, Exchange Traded Funds (ETFs) and some digital gold providers are permissible under the SIPPs scheme. 

Read Investments in Gold – Chapter 10: Paper Gold Investments
Read Investments in Gold – Chapter 11: Gold Stocks
Read Investments in Gold – Chapter 12: Gold Futures
Read Investments in Gold – Chapter 13: Technical Analysis
Read Investments in Gold – Chapter 14: The Motivations for investing in Gold
Read Investments in Gold – Chapter 15: Conclusion