Because gold sovereign coins are legal tender

Income Tax, Council Tax, National Insurance and VAT issues.

Re: Because gold sovereign coins are legal tender

Postby Farmer » Wed Oct 07, 2009 2:32 pm

joefree wrote:See : http://www.allbusiness.com/crime-law-enforcement-corrections/criminal-offenses/12660170-1.html

The jury found that Robert and Lori Kahre devised and used a payroll scheme that concealed and disguised the true amount of income received by his employees and the employees of the companies for which he provided payroll services. Robert Kahre maintained an office at 6270 Kimberly Avenue in Las Vegas where he claimed to pay employees in gold or silver coins, but which were actually immediately exchanged for pre-determined envelopes of cash. The face amount of the coins was one-eighth the amount of pay that the employee actually earned and received in the cash envelope. The defendants told the employees that the income was either not taxable or that they should falsely report to their income to the IRS as the face amount of the gold and silver coins.

During the course of the scheme, cash wage payments of at least $25 million were paid to Robert Kahres employees and cash payments of approximately $95 million were paid to the employees of the other contractors. No federal tax withholdings were made from the paychecks, and the wages were not reported to the IRS. The defendants told the employees not to discuss the scheme with any outside agencies. The defendants also took steps to prevent the dissemination of information that might reflect the correct amount of income paid to the employees, such as by using false invoices, keeping two sets of books, using false names on payroll records, making false statements on mortgage applications, and using nominees to conceal assets.


Well that was just a scam.

There was another case however where someone was found not guilty because he really did pay his employees in gold coins. The reason that they were found not guilty was because the US constitution declares that money can only be gold and silver, and the IRS could not define what money is because if they did they would give the whole scam away that they are playing.

I started another thread today called Aladins Cave of Pointers where the guests of a radio show stated that the money in the US on the gold standand pre 1933 was 'money', and the fiat money post 1933 is 'currency'.
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Re: Because gold sovereign coins are legal tender

Postby gepisar » Wed Oct 07, 2009 2:43 pm

Farmer wrote:All income is taxable according to them. The example I gave just means that it would be under the value where taxation started. If you were paid in gold or anything else that has value, the inland revenue would calculate the value and tax you on it if it was more than their tax free amount. They just can't do it with the gold sovereigns because they are legal tender, so have to take the face value.

This is what I was alluding to. Irrespective of scheme (labour exchange for example) the tax office will calculate a taxable value. In the scenario you propose, surely the inland revenue (HMRC, whoever) could still say, "ok, the face value is 50quid, but the fiat currency value is 10x, bosch, heres the bill, payable in GBP notes.". I think I would need to read the tax rules as to what "earnings" or "income" means (i.e. face value, real value, perceived value?)
This thread has brought something to light though: if I did swap cars for houses, how can I be taxed? The seller agreed to trade. There was no "money" interim. The car exchanged for house on the agreement of both parties. Someone would have to adjudicate on whether my house collection was worth more than my car collection at the start. And that could only be done when the houses were sold for cash...i.e. had monetary value. So, turning back to the gold theme, if I was paid in gold, traded in gold, and on the day of my death liquidated my gold, only then would it be taxable? I need to ask the bullion dealer...

Sorry to detract from the gold sov's theme.
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Re: Because gold sovereign coins are legal tender

Postby Farmerboy » Wed Oct 07, 2009 2:49 pm

Any questions on bullion - fire away.

All answered as per the tenents of common law.

Or, you can pm me or go to my website - www.bleyer.co.uk. Sorry it's only one page, it's being redone.
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Re: Because gold sovereign coins are legal tender

Postby joefree » Thu Oct 08, 2009 6:51 am

Hi Farmerboy - my question relates to the manipulation of the gold and silver prices as alleged by GATA and others. What's your take on this? Do you agree with the accusations or do you think that gold and silver operate in a 'free market?'

Joe
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Re: Because gold sovereign coins are legal tender

Postby gepisar » Thu Oct 08, 2009 7:59 am

joefree wrote:Hi Farmerboy - my question relates to the manipulation of the gold and silver prices as alleged by GATA and others. What's your take on this? Do you agree with the accusations or do you think that gold and silver operate in a 'free market?'

Joe

Poor Farmerboy, I'll bet hes going to be asked this question a lot!!! :mrgreen:
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Re: Because gold sovereign coins are legal tender

Postby Farmer » Thu Oct 08, 2009 8:37 am

Hi joe, the answer is simple. If it were a free market, why does the price not rise when there has been growing demand for the metals.

Production of the United States Mint American Eagle Silver Proof and Uncirculated Coins was suspended this year because of unprecedented
demand for American Eagle Silver Bullion Coins. All available silver bullion blanks are being allocated to the American Eagle Silver Bullion Coin Program, as the United States Mint is required by Public Law 99-61 to produce these coins "in quantities sufficient to meet public demand..."

The United States Mint will resume the American Eagle Silver Proof and Uncirculated Coin Programs once sufficient inventories of silver bullion blanks can be acquired to meet market demand for all three American Eagle Silver Coin products. However, due to the continued, sustained demand for American Eagle Silver Bullion Coins, 2009-dated American Eagle Silver Proof and Uncirculated Coins will not be produced.


This year has seen mints world wide halting production because they were unable to get the metals, yet the price has not been rising. COMEX is known to have used Canadian gold for its deliveries. It is known that only one or two US banks hold most of the futures short positions in gold. It is very likely that there is no more gold in the US because it has been used up for shorting purposes. It has also been reported that Germany and one middle eastern country has asked the US to return their gold reserves and the US has said no, because they probably don't have it anymore.
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Re: Because gold sovereign coins are legal tender

Postby Farmerboy » Thu Oct 08, 2009 9:04 am

Is the price artificially low – I’m not allowed to say. But... the fix price is set by six banks in London(by telephone, I might add) and it is gleaned from their business – the demands placed upon their bank and their ability to fulfil them. They raise a flag to show that they are in session (law of the flag may apply here) and lower it when they are done. The fixing doesn't take into account what is happening on my desk, for instance. Imagine someone leaning out of an upstairs window above a market place and shouting "Apples are 20p per pound!" The trade in the marketplace below is different to what's going on upstairs - two different markets for the same commodity. "What apples?" you say, "not seen apples for weeks!" Then later you hear "25p per pound now..." Does that make sense? So who is to say that gold is artificially low - it is all supply and demand of a certain commodity in a certain market.

However, if sterling and the USD continue to fall then you will need more of it to buy a bar of gold. So let me ask you a question. Does the fix take into account the value of the currency that it is being set in? Surely if the dollar is weakening, the price of gold should, under normal circumstances, go up because the amount of dollars that you need to buy a bar goes up. But I am just a simple bullion dealer and not authorised to talk about such things...

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Re: Because gold sovereign coins are legal tender

Postby gepisar » Sat Oct 10, 2009 3:30 pm

MikeThomas wrote:Off on a slight tangent here but I'm sure I remember an old law that stated you could be paid in the goods you made. For example: If you worked in a factory that made bread, you could claim the equivilant face value of bread.


Slightly off tangent II:
I recall a case a few years back, (i was only young then!) where a company only dealt in labour, I think it was a window cleaning company. The details are vague, but the Inland Rev made an assessment of their earnings and sent the tax bill. The company returned the offer stating how many windows of Inland Rev's building they would clean to "pay" that bill. Anyone remember that one?
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Re: Because gold sovereign coins are legal tender

Postby Farmerboy » Sat Oct 10, 2009 5:50 pm

Oh! Something else about the pricing of gold etc. Electronically traded bullion is counted on the same table as the real gold. So the amount being traded is grossly inflated.

So, if the trading in 'paper' gold is brisk then the price becomes volatile. The fact that your gold hasn't moved or been traded doesn't matter. The price is being adjusted by the trading of what is in effect, a different commodity.

Just so's you know.

FB
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Re: Because gold sovereign coins are legal tender

Postby fredqwerty » Fri Nov 13, 2009 1:57 pm

Any ideas on how the HMRC approaches the following scenario?
My company buys a 1oz Britannia gold coin (£739) and puts in into stock.
I then buy it from the company for its £100 face value.
Is there an obligation to sell at free-market material value if it exceeds the face value ?

Let's say that everyone suddenly wanted 50p coins & my company had a bucketful of them.
Can the company be forced to sell them for only 50p even if people were prepared to pay £3 for each one?
Why not treat them like any other commodity?
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