Gold is a very popular asset to own, and some advisors even recommend about 10% of your total portfolio should be made up of gold. Some of our clients also inherit these assets as their grandparents or other family members have seen harder times before and trust the precious metal more than paper money…
However, not everybody wants to keep this asset category in his portfolio forever, so the question is what can happen in Germany once you sell your gold positions?
First of all, when we are talking about gold here, we are talking about the actual asset – not shares in gold mines or comparable notes from other commodity entities. Whether this gold comes by way of coins or bars is irrelevant as long as it has a physical presence.
Second, we need to look at how this gold has come into your possession. Regardless of whether you inherited it, received it as a gift or purchased it yourself the next question is how long have you (to include a potential previous owner) held it?
Third, what have you done with the gold during your (!) holding period? Odds are, it just sat there in a safe place, but some clients like to use it for further income generation (lending….).
If you (to include potential previous owners) held the precious metal for more than one year and did not do anything with it, then you can pocket any capital gain tax-free under German law. Flip side is, if you are selling at a a loss, the loss will be also disregarded.
Similar to selling real estate and crypto, the holding period extends to 10 years if you use your gold for any income generation along the way.
So, gold is another great asset to have and sell tax-free under German law. Since it is not as commonly used for income generation usually any capital gain after a 1 year holding period will come without any tax consequence, regardless of the total gain.
Please let the taxperts know if you want to know more about selling precious metals under German tax law.
