XAG Intrinsic Tender
Mark BainbridgeDirector – Gold Stackers Australia Pty LtdDirector – Gold Stackers Australia Pty Ltd
Overview
• Face Values on legal tender bullion coins
• Problems holding coins in SMSFs• Problems holding coins in SMSFs
• How Intrinsic Tender came about
• Local and Overseas Versions
• Marketplace acceptance
Intrinsic Tender moving forward• Intrinsic Tender moving forward
What is Legal Tender?
Back when the system worked
AGW .2354 Oz.
Face Value £1
£ per Oz. £4.248
Denomination .9677 Oz.
$ Face Value $20
$ per Oz. $20.67
Modern Bullion Coin Face Values
AGW 1 Oz. 1/2 Oz. 1/4 Oz. 1/10 Oz.AGW 1 Oz. 1/2 Oz. 1/4 Oz. 1/10 Oz.
$ Face Value 50 25 10 5
$ per Oz. $50 $50 $40 $50
Modern Bullion Coin Face Values
AGW 1 Oz.
$ Face Value $100
$ per Oz. $100
ASW 1 Oz.
$ Face Value $1
$ per Oz. $1
Modern Bullion Coin Face Values
ASW 5 Oz.
$ Face Value $8
$ per Oz. $1.60
Modern Bullion Coin Face Values
AGW 1 Kg.
$ Face Value $3000
$ per Oz. $93.31
Modern Bullion Coin Face Values
AGW .2948 Oz.
$ Face Value $200
$ per Oz. $678.43
AGW .2354 Oz.
$ Face Value $25
$ per Oz. $106.20
AGW 0.5 gram
$ Face Value $2
$ per Oz. $124.41
Giveaway Time!
Self Managed Super Funds
• SMSF are pretty much the only way to hold
physical precious metals inside super.physical precious metals inside super.
• Recent regulations treat bullion coins and bars
differently.
• Upshot seems to be that you are required to
store your coins separately and have them store your coins separately and have them
insured.
The RegulationSUPERANNUATION INDUSTRY (SUPERVISION) REGULATIONS 1994 - REG 13.18AA
(1) For section 62A of the Act, this regulation applies to investments involving
any of the following ( section 62A items ):any of the following ( section 62A items ):
(a) artwork;
(b) jewellery;
(c) antiques;
(d) artefacts;
(e) coins, medallions or bank notes;
(f) postage stamps or first day covers;
(g) rare folios, manuscripts or books;
(h) memorabilia;(h) memorabilia;
(i) wine or spirits;
(j) motor vehicles;
(k) recreational boats;
(l) memberships of sporting or social clubs.
The Regulation
Paraphrasing from REG 13.AA the following must be observed:
• Asset must not be leased to related party
• Item must not be stored in private residence of related party
• Decision on storage of item must be documented
• Item must be insured in fund's name
• Item must not be used by related party
• Transfer of asset to related party requires independent valuation• Transfer of asset to related party requires independent valuation
FULL TEXT : http://www.austlii.edu.au/au/legis/cth/consol_reg/sir1994582/s13.18aa.html
The Confusing Bit
Is my fund's investment in bullion coin
considered to be a collectable and therefore
required to comply with the restrictions required to comply with the restrictions
contained in regulation 13.18AA?
Coins are collectables if their value exceeds
their face value. Therefore, if bullion coins
have a value that exceeds their face value and
they are traded at a price above the spot price
of their metal content, they will be a
collectable and your SMSF must comply with
FROM: Scenario questions for
investments in collectables
and personal use assets made
after 1 July 2011
collectable and your SMSF must comply with
regulation 13.18AA in relation to the
investment.
SOURCE: http://www.ato.gov.au/Super/Self-managed-super-funds/In-detail/Assets-and-investments/Collectables-
and-personal-use-assets---questions-and-answers
The Inspiration
ISO 4217 Currency CodesCode Number Currency
AUD 036 Australian Dollar
CNY 156 Chinese YuanCNY 156 Chinese Yuan
EUR 978 Euro
GBP 826 Pound Sterling
USD 840 United States Dollar
XAG 961 Silver (One Troy Ounce)
XAU 959 Gold (One Troy Ounce)
XDR 960 Special Drawing RightsXDR 960 Special Drawing Rights
XPD 964 Palladium (One Troy Ounce)
XPT 962 Platinum (One Troy Ounce)
The Solution
The Intrinsic Tender bullion rounds have a face value,
and because that face value is denominated in XAG, it and because that face value is denominated in XAG, it
can never be worth more than it’s face value.
Therefore you get to store it at home for your SMSF.
Front Back Mintage
Mirror Frosted 500
Mirror Mirror 500
Mary had a little Lamb
Following on from the success of the Penny design, we
proceeded to produce a cheaper round to suit bullion
investors rather than coin collectors.investors rather than coin collectors.
The XAG Ram was designed to be sold in tubes, and
therefore save on capsules. It was double frosted to reduce
fabrication costs as much as possible.
Still production costs were too high for a competitive
bullion coin, and they couldn’t compete effectively with
cheaper bullion from the United States.
Front Back Mintage
Frosted Frosted 300
The ones that got away
4 variants of the Ram Shilling were originally
commissioned, with encapsulated mirror
varieties that would appeal to collectors. varieties that would appeal to collectors.
They were discontinued due to minting
difficulties, and have since become highly
sought after in the collectible market.
Front Back Mintage Value ObtainedFront Back Mintage Value Obtained
Frosted Mirror 25 $200
Mirror Frosted 25 $230
Mirror Mirror 12 $690 (Sep 2013)
Home.. Home on the Range
Designed by Australian artist Elise Martinson,
previously a coin designer for the Perth Mint, previously a coin designer for the Perth Mint,
the XAG Buffalo was designed to clearly indicate
that this round was US manufactured.
With a price point cheaper than US Silver Eagles,
suddenly we had a product that appealed to
bullion investors. The entire 2013 run was sold
out within 6 months.
Front Back Mintage
Mirror Mirror 16,000
Limited Edition Symposium Round
• First Rounds to be minted with
the 2014 XAG reversethe 2014 XAG reverse
• Strictly Limited to 1000
• Available now from the
registration desk
Front Back MintageFront Back Mintage
Mirror Mirror 1,000
Coming soon in 2014
• 5 and 10 XAG bars produced in Australia
• XAG variants from additional countries• XAG variants from additional countries
• Introduction of XAU denominations
• Gold Symposium “Gold” rounds for
Symposium 2014.
Where To Buy
State Dealer URLState Dealer URL
Victoria
Gold Stackers Australia Pty. Ltd. www.goldstackers.com.au
Peter Strich Stamps and Coins www.peterstrich.com.au
New South Wales Bullion Money Pty. Ltd. www.bullionmoney.com
Western Australia Bullion Bourse Pty. Ltd. www.bullionbourse.com
Queensland Maggies Bullion www.maggiesbullion.com
... and most importantly here at the registration desk here at Symposium.