How Do I Invest in Silver?

Author: Ian Davis - Bullion Manager

Published: 19 Jul 2017

Last Updated: 21 Aug 2019

If you have found this blog but wish to buy our best offers in silver, click here.

We also have dedicated pages for the cheapest silver coin in the UK, 1kg silver bars and also the popular one ounce silver coin.

Investing Money 

If you wish to invest your money to see a better return on investment, many investors would recommend a portfolio of different investments such as stock, shares and premium bonds, Most would also recommend, as we do too, investing in commodities such as gold and silver

Why Precious Metals For Investment?

In this blog, we will express our opinions on investing in precious metals; silver and gold. It is good to note that precious metal prices rise and fall. We do not accept any liability for any advice taken from this blog. It has been written to be helpful and informative as best we can. 

Investing in tangible commodities such a precious metal helps keep control over your investment portfolio. Despite inflation and currency exchange rates, your precious metals will always have an intrinsic value so will always be worth something. You also have the added control and security of owning the metals physically.  

Is Silver a Good Investment for the Future? 

Most investors favour gold over silver as investment because silver is subject to Value Added Tax (VAT) at the current rate, whereas investment gold is VAT free. 

We normally advise to invest in gold rather than silver, but there are many silver bugs and analysts who believe silver is a better investment because it has more potential. More so when buying outside the EU, where silver is not VAT-able. If you choose to add silver to your investment portfolio, we try to help by having a range of competitively priced silver bullion products, including coins and bars.

Silver tend to be more volatile than gold, typically outperforming gold in swings form bottom to top. Whereas gold is traditional store of value, and reacts to financial markets, silver is much more of an industrial metal, and its price is more dependent on trade cycles. 

Gold Silver Ratio 

We would advise investors to look at the gold silver ratio. When the ratio is high, we would tend to prefer to invest in silver, and conversely, when the ratio is low, then we would tend to buy gold. The terms "high" and "low" are relative, and there is no "right" or "wrong" answer.

Investing in Silver Bullion 

When Should I Buy Silver?

We will give the same advice which was given on our "Invest in Gold" guide; buy when the price is low. Simple right?

Don't Be a Lemming

We do get customers following the trends of others, buying when silver is high to pre-empt silver rising further and vice versa, selling when silver is low to pre-empt silver dropping further. 

This will occasionally happen during a bull run or a sell-off for example, often following economic downturns and geo-political turmoil. Our advice is to not be a lemming and to do your research thoroughly if prices are already high. 

How do I Buy Silver?

The easiest way to invest in silver is to purchase online or visit us at our showroom. We would definitely recommend a showroom visit if you want to purchase one of our amazing monster box offers as they can be quite heavy. We can arrange delivery all over the world, contact our showroom for details.

As with any purchase, always look for the cheaper option. When you "shop around" make sure to note if prices are inclusive or exclusive of VAT. You can be assured that prices quoted by Chard are all inclusive of VAT to make it that little bit easier for you. You can pay by debit card, bank transfer or cash (subject to money laundering regulations).  

What Silver Do I Buy?

You can always contact us by telephone for advice on current offers and the best buys in relation to your investment amount. However, we are not financial advisors but will always try and help the best we can. Silver can be bought in bar or coin form. These are usually at a purity of 0.925 (sterling) silver to 0.999 (fine) silver.  

Which Silver Coins are the Best Investment? 

We see more investors purchasing coins over bars. This is probably because they are more aesthetically pleasing and even investors like to vary their collection of investment silver. All coins have a face value but their intrinsic value will tend to be worth more. Coins are minted in various sizes, the most common being one troy ounce. We do stock coins up to 10kg.

 

Coins are minted all over the world. We especially like silver coins minted by the Perth Mint but as these coins are not exempt from Capital Gains Tax, it may not be the best option for you, but we will get to that later on in the blog.  

Selection of Perth Mint Silver Bullion Coins

Perth Mint Silver Coins

The Perth Mint make several silver bullion coins which are popular with investors here in the UK.

Australian Crocodile 

Australian Kangaroo

Australian Lunar Coins

Australian Kookaburra 

Australian Koala

Capital Gains Tax Free Silver

 British coins are always a good buy if you wish to be exempt from Capital Gains Tax (CGT). 

British Britannia

British Queen's Beast Series

British Lunar Series 

World Silver Coins

Other silver coins from around the world you may be interested in are:

Chinese Panda

Canadan Maple

American Eagle

Austrian Philharmonic

More Silver! 

We do have more coins available as well as offers on tubes of coinsboxes of coins and coin bundles, ideal for starting off your collection. 

Silver Bars

Silver Bullion Bars Available To Buy

If you like to purchase in bar form we have 1kg, 500g and 1oz silver bars in stock. Bars sometimes work out as a cheaper option to 1oz coins, but as they do not have a legal tender status, it is subject to CGT as well as VAT. 

You will find our full selection of bars on either our second-hand silver bars page or our brand new branded silver bars page.

If you like to purchase in bar form we have 1kg, 500g and 1oz silver bars in stock. Bars sometimes work out as a cheaper option to 1oz coins, but as they do not have a legal tender status, it is subject to CGT as well as VAT. 

You will find our full selection of bars on either our second-hand silver bars page or our brand new branded silver bars page.

Other Silver Buys

Silver Rounds

Other ways to buy include investment bags of pre-decimal silver coins or silver rounds. Rounds may feature a denomination but they are not legal tender. They tend to be issued by smaller independent mints and are often popular for their designs.

Do I Pay VAT on Investment Silver? 

If you have read the start of this blog then you will know that the answer is yes, if you take delivery of your items. 

As silver bullion are subject to VAT, including coins, even though they have a face value, they are sold above and beyond their face value and so unfortunately subject to VAT at the local rate. But why is gold tax free? Gold has been exempt from VAT since January 2000. This was to make the UK more competitive within the EU as several other member states had lower tax rates for gold, some even were exempt. Therefore all member states now have a single exempt tax rate for gold investment. Unfortunately, we are unsure why this does not extend to investment silver.  

We now offer VAT free silver when stored in our Guernsey vaults. For more information, click here.

Special Scheme Silver

There are some ways around not paying VAT. The first is to buy on behalf of a company and not pay VAT, but the profits made may also be owned by the company. Alternatively, as a consumer, you can purchase second-hand silver. This will mean you only pay VAT on the sellers' profit margins, not on the whole amount. Don't forget, when you come to sell back your silver you will lose the VAT element so as a long-term investment, it is always best to buy second hand where you can. We have a full explainer on our page for silver sold on the margin scheme

Capital Gains Tax 

Investment silver, (as well as gold), are also subject to Capital Gains Tax. This is tax payable on profits made in a financial year, currently over £11,300*. This can include any investment such as property as well as bullion. If this is likely to be the case, we would strongly recommend in investing in British silver coins as all British Legal tender is exempt from CGT. If you are unlikely to be subject to CGT then look for the cheapest silver, whether it is British or not.

If you have any other questions, please email us at [email protected] and we will do our best to help. A good place to start will be our Best Value items.

* This figure is subject to change. Click here to find the latest allowances.

Further Reading

You may wish to view all of our articles on our silver guide

This guide and its content is copyright of Chard (1964) Ltd - © Chard (1964) Ltd 2019. All rights reserved. Any redistribution or reproduction of part or all of the contents in any form is prohibited.

We are not financial advisers and we would always recommend that you consult with one prior to making any investment decision.

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