The Value Added Tax (Investment Gold) Order 1999

Explanatory Note

(This note is not part of the Order)

This Order, which comes into force on 1st January 2000, implements the exemption for investment gold, the option to tax and the “reverse charge” provisions of Council Directive 98/80/EC, 12th October 1998—Special scheme for investment gold—amending Council Directive 77/388/EEC.

Article 2 adds a new group 15, “Investment Gold”, to Schedule 9 to the Value Added Tax Act 1994 (c. 23) (exemptions). The new Group 15 has three items and 4 notes. It exempts certain supplies involving investment gold. Item 1 exempts supplies of investment gold. Item 2 exempts supplies conferring rights to possession of investment gold including supplies of unallocated investment gold, as well as loans, swaps, forward and future contracts involving investment gold. Item 3 exempts supplies by agents acting in the name of their principal in respect of supplies exempted under item 1 or 2.

Note 1 to the new group 15 defines “investment gold”. It allows the Commissioners to publish in a notice a list of coins qualifying as investment gold.

Note 2 permits the Commissioners to specify in a notice the period for which the list of gold coins published shall have effect.

Note 3 excludes from item 2 the grant of an option or the transfer or surrender of an option.

Note 4(a) disapplies the exemption for supplies involving investment gold between members of the London Bullion Market Association which are zero-rated under article 4 of the Value Added Tax (Terminal Markets) Order 1973 (S.I. 1973/173).

Note 4(b) disapplies the exemption with respect to certain transactions involving investment gold between a member of the London Bullion Market Association and a non-member. Special arrangements for these supplies are set out in article 5 to 7 of the Value Added Tax (Terminal Markets) Order 1973.

Article 3 prescribes the circumstances in which traders may opt to tax supplies involving investment gold (opted supplies) and allows the Commissioners to specify conditions in a notice published by them.

Article 4 ensures that all opted supplies of investment gold fall under Section 55 of the Act (Customers to account for tax on supplies of gold etc.).