Gold ETF tax-free: Top 5 ways to buy gold cheaper and better!

Buying gold is and remains an evergreen for investors – but that’s no reason to waste money unnecessarily when trading! We have therefore compiled the cheapest and best ways to utilise this valuable commodity for you: Find out everything you need to know about ’ Gold ETF tax-free!

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High costs when buying gold: Is there a tax-free option for gold ETFs?

Gold is known as a ‘safe haven’. Many investors use the stable gold price to hedge against high fluctuations on the stock market. Even today, gold is often used to increase the stability and diversification of a portfolio.

• The precious metal is extremely rare on our planet – only the volume of an Olympic swimming pool is available to us in total
• This makes gold a limited resource and guarantees a certain value retention
• In combination with the high demand, this ensures a corresponding price

In the past, however, trading in gold was associated with high fees: Analogue providers charged high sums for their services. Fortunately, this market has developed significantly in recent years due to digitalisation and new options.

Without further ado, let’s move on to the best and cheapest ways to add gold to your portfolio to benefit from increased diversification and stability.

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1,300 ETFs suitable for savings plans

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1.iShares Physical Gold ETC tax-free

ETFs are funds that are based on an index and are therefore not actively managed:

• They can track various indices, but can also contain other underlying assets such as commodities
• Passive management has a major advantage: ETFs are popular due to their particularly low costs, as they do not require an expensive fund manager for their composition

Unfortunately, the EU prohibits the 100 per cent tracking of commodities in pure ETF form. By law, ETFs must be diversified and are therefore not allowed to invest in just one commodity class, such as gold. It is therefore not possible to buy a pure gold ETF in the EU.

However, there is an interesting alternative in the form of ETCs (‘Exchange Traded Commodities’). These exchange-traded commodities are well suited to buying gold. From a legal point of view, ETCs are not investment funds, but ‘perpetual bonds’, which makes it possible to invest in gold.

The best-known variant is the iShares Physical Gold ETC, which now has an impressive volume of €13.5 billion. At 0.12% per year, the fees here are also manageable, which is why this variant can quickly pay off for investors.

• Gold ETCs are almost always backed 100% by physical gold to minimise the risk of insolvency
• The raw material is stored and secured by special custodian banks

If you have been invested for more than 1 year or if the ETC offers delivery, your investment remains tax-free. Profits from the sale of gold (without ETCs) are tax-free anyway.

2.Gold ETC tax-free? – ETCs with delivery

Since the tax issue significantly limits the attractiveness of the iShares Physical Gold ETC, but can be avoided through delivery, we will next take a look at precisely such ETCs!

Xetra Gold and Euwax Gold are among the best-known providers. They differ significantly in size (Xetra manages 12 billion euros, Euwax ‘only’ 1 billion), but are otherwise relatively similar.

Since there are no storage costs at Euwax, but 0.36% at Xetra, the prudent investor may see a price advantage here. Unfortunately, the spread on Euwax is also somewhat higher, so that the price difference is minimised.

• Of course, these offers are also fully backed by physical gold and, as the title has already made clear, you can arrange for delivery
• Both companies will then take your gold to your bank for a fee

You do not have to use this service to benefit from tax exemption. You can also take advantage of this benefit if you have your gold managed in digital form by these two providers.

3 WisdomTree Swiss Gold ETC –Gold ETC tax-free purchase

One product that combines the advantages of our points 1 and 2 is the Physical Swiss Gold ETC from WisdomTree. Here, 2.5 billion euros are managed and 0.15 % annual costs are charged.

However, as delivery of the gold (physically deposited, of course) is also possible, profits remain tax-free – regardless of whether you utilise this option or not. This product is also available in a savings planner.

4. Physical gold – coins

Those who prefer a more down-to-earth approach can be happy with the ‘classic’ purchase of gold coins. To do this, we visit a professional gold dealer or our house bank to purchase one or more coins.

• Gold coins can build up a collector’s value over time if they are of the right mintage
• Compared to the actual value of the raw material, however, this is negligible
• A flawless coin without fingerprints is also required to be able to use this effect

If you are interested in purchasing coins, you should take enough time to do your research. If you go to your bank, you will have to reckon with high costs. Gold dealers are usually the better choice and often have a larger selection for you.

5. Physical gold – bars

The idea of owning your own gold bar is certainly attractive, but in reality it is often associated with difficulties. Especially if you buy a 1-kilogram bar, things can get complicated when it comes to selling it.

• Because with a current value of around 50,000 euros, it can be difficult to find a buyer quickly
• Gold dealers therefore often need more time to sell and/or demand high discounts

The better alternative here is often to buy 10 x 100 grams to guarantee a smooth sale. In this way, buyers can be found quickly. However, gold bars are generally more suitable for buying large quantities of gold. The slightly more expensive coins are therefore more suitable for smaller amounts.

The last two options, coins and bars, involve physical storage, for which you should consider a few special features. You have the following options:

• Customised hiding places on your own property: Some owners come up with unusual hiding places for their gold reserves. However, there is a risk that these could be discovered by chance. Such stocks are therefore not really protected.
• Your own safe: If you want to store your gold at home, you can use your own safe. This can be locked with a key or your own code. This option is cheaper than a bank safe deposit box, for example. However, smaller models could be taken in the event of a break-in.
• Safe deposit box: This option is particularly secure, but also involves high storage costs.

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Conclusion:Gold ETF tax-free – something for everyone!

There are numerous options for acquiring gold, each with advantages and disadvantages. For me, however, the clear winner is the WisdomTree Swiss Gold ETC, as it combines numerous advantages in one product.

Thanks to tax-free delivery and the low costs of an ETC, this is the best offer for most investors. The option of holding this ETC as a savings plan is an additional bonus. Furthermore, an investment in an ETC eliminates the need for physical storage of gold, which can be expensive, as a safe deposit box at home or a bank safe deposit box is required, for example.

Gold will remain an integral part of many portfolios. However, modern financial products and the use of neobrokers instead of old-fashioned ‘analogue banks’ are making trading increasingly easier and cheaper. Smartbroker and Scalable Capital Broker in particular stand out in this context, as they offer the particularly good Swiss Gold ETC.