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Section 6 of 6

Gold and Canadian Tax

Canadian law draws a hard line at 99.5 percent purity. Which side your gold falls on changes the sales tax, the registered plan rules and how a gain is treated.

99.5% The purity line
110% TFSA coin value cap
$1,000 Personal-use floor rule
Explore the Guide

Gold and Canadian Tax: GST, Capital Gains and Registered Plans

Canadian tax law draws a hard line between gold as a precious metal and gold as a product, and it draws it at 99.5 percent purity. A bar sits on one side of that line. Your 18K chain, at 75 percent gold, sits firmly on the other. That single number changes the sales tax you pay, whether the metal can go in a registered plan, and how a gain is treated when you sell.

Plain gold bullion bars on a dark surface scattered with dried red and orange maple leaves
The rules below come from the Excise Tax Act, the CRA capital gains guide and CRA Income Tax Folio S3-F10-C1, all linked in the text.

What Vanhess does and does not do

Vanhess is a jewellery shop in Coquitlam, British Columbia. We sell solid gold jewellery. We do not sell bullion, bars, coins or wafers, we do not buy or broker investments, and we are not financial advisors, tax advisors or a bullion dealer. Everything on this page is general information to help you understand how gold is priced and valued. It is not financial, investment or tax advice. Speak to a licensed advisor or an accountant before making a decision about your money.

The 99.5 percent line

The Excise Tax Act defines a precious metal as a bar, ingot, coin or wafer composed of gold, silver or platinum, refined to a purity of at least 99.5 percent in the case of gold and platinum, and 99.9 percent for silver. Metal meeting that definition is a financial instrument under the Act. Jewellery is not, regardless of how well made it is.

Federal treatment only. Sources: Excise Tax Act s.123(1), CRA Folio S3-F10-C1 paragraphs 1.51 to 1.54, and CRA guide T4037.
Question Bullion at 99.5%+ Gold jewellery
Is it a precious metal under the Excise Tax Act? Yes No
GST and HST on purchase Exempt Charged in full
Allowed in an RRSP, TFSA, RESP or RRIF? Yes, if refiner, purity and purchase-source conditions are met No
Capital gains category Ordinary capital property Listed personal property
Does the $1,000 floor rule apply? No Yes, as personal-use property
Can losses offset other gains? Ordinary capital loss rules Only against listed personal property gains, expiring after seven years

Be careful

We could not verify British Columbia's provincial sales tax treatment of bullion in the Provincial Sales Tax Exemption and Refund Regulation, the BC Tax Interpretation Manual or the province's published exemption list, so this hub makes no claim about it. The federal position above is quoted from the statute. Confirm the provincial side with a BC tax professional.

An important quirk: jewellery is listed personal property

The CRA capital gains guide (T4037) defines listed personal property as a type of personal-use property that usually increases in value, and the list it gives includes jewellery and coins. Gold bars are not on that list. This is not a technicality: listed personal property has its own loss rules, and personal-use property carries a rule that treats any cost or proceeds below $1,000 as if it were $1,000.

Frequently Asked Questions

Do I pay GST on gold bars in Canada?

Gold in bar, ingot, coin or wafer form refined to at least 99.5 percent purity meets the definition of a precious metal in subsection 123(1) of the Excise Tax Act and is treated as a financial instrument, so GST and HST are not charged on it. Gold jewellery does not meet that purity definition and is taxed as a normal retail purchase.

Do I pay tax when I sell my gold jewellery?

You may. CRA treats jewellery as listed personal property, a form of personal-use property. If both the adjusted cost base and the proceeds are $1,000 or less there is no gain or loss to report. Above that, a gain is reportable. This is general information, not tax advice, so speak to an accountant about your own situation.

Can I hold gold in my TFSA?

Qualifying bullion, yes. Under CRA Income Tax Folio S3-F10-C1, a Royal Canadian Mint legal tender bullion coin at a minimum 99.5 percent purity qualifies, provided its fair market value does not exceed 110 percent of the value of its gold content and it is bought from the Mint or a specified corporation. Bars from an LBMA-accredited refiner qualify on similar terms. Jewellery does not qualify.

Is Vanhess giving tax advice here?

No. We are a jewellery shop, not accountants or tax advisors. Everything above is a plain-English summary of published law and CRA guidance, with links so you can read the source yourself. Get advice from a qualified professional before acting on it.

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