§ Mr. Staintonasked the Chancellor of the Exchequer if, for the guidance of the public, he will make a statement as to the tax treatment of profits or losses on gold sovereigns, krugerrands, etc., held by individuals.
§ Dr. Gilbert:Profits on transactions involving the purchase and sale of currency are chargeable to income tax, and losses may be relieved against other income, if the transactions involve the carrying on of a trade. Whether a trade is carried on depends on the facts of the case.
Where the transactions do not constitute the carrying on of a trade, capital gains tax applies to all forms of non-sterling currency other than currency required for the purpose of meeting personal expenditure outside the United Kingdom of an individual or his family. Krugerrands are accordingly within the charge to capital gains tax, whereas sovereigns minted in 1837 or later are not.