Rare Coin Investments and GST/HST
Effective January 1, 1991, Canadian residents purchasing rare U.S. coins from U.S. Tangible Investment
Corporation are subject to the 7% Goods and Services Tax (GST) under the following circumstances:
- If a Canadian resident wishes to take physical possession in Canada of a rare coin portfolio purchased after January 1, 1991.
- If a Canadian resident has purchased a rare coin portfolio under a leveraged purchase plan, prior to January 1, 1991 and elects to take physical possession after January 1, 1991. Canada Customs and Revenue Agency has determined that GST is applicable based on the date an taxable item enters Canada rather than the actual date of purchase. For example, if a Canadian client purchases a $20,000 rare coin portfolio in 1989 under a leveraged purchase plan, and elects to take actual possession of the portfolio after January 1, 1991, the rare coin portfolio is subject to a 7% GST of the original purchase amount ($1400) upon delivery in Canada.
- As of April 1, 1997, the provinces of Nova Scotia, New Brunswick and Newfoundland have modified the GST to include federal tax resulting in the Harmonized Sales Tax (HST) at an effective rate of 15%. The previous listed examples are subject to the 15% rate.
In order to provide our Canadian clients the best of service, we have arranged for several options regarding
the disposition of their rare coin portfolios.
1. If a Canadian resident wishes to take delivery of his portfolio, the coins will be sent via registered, insured
mail. Canada Customs and Revenue Agency will bill the client for the 7% GST or 15% HST based on the purchase amount as per the invoice.
2. If a Canadian resident elects to have the coins stored in the U.S. until he directs the assets be
sold and the proceeds forwarded to him, then GST/HST does NOT apply to his transaction. There are currently three
options for storage available.
- U.S Tangible will provide segregrated, insured storage in our vaults in Dallas at no cost to the client.
- If the client wishes a third party trustee, there are independent trustees that provide secure holding at nominal fees. The typical charge is .005% of the original cost of the portfolio per year. For example, a $50,000 portfolio would cost $250 per year for storage fees. By comparison, 7% GST is $3,500 which is equal to storage fees for 14 years. The number of firms providing these services change from time to time as do their fees. U.S. Tangible may recommend firms for this service but the client is under no obligation to use those firms.
- U.S. Tangible will send the rare coin portfolio to any other designated bank according to the directions of the purchaser. Storage fees and arrangements must be made by the purchaser.
Please contact us if there are any questions regarding GST/HST procedures or fees.
Call toll-free at 800-US-COINS (800-872-6467) and ask for Burnett Marus.
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