Wealth guide
Precious metals in a family office: custody, valuation, reporting
Updated: · Leutrim Miftaraj, FLIORE · Editorial standards · Other languages: Deutsch · Français · Español
Short answer
Family offices hold precious metals physically or through securities. With physical custody, the key question is whether the bars are allocated to the owner or whether there is only a claim to delivery (unallocated). Valuation is at market price, usually in USD per troy ounce, converted into the reporting currency. Investment gold is exempt from VAT in Switzerland and the EU; silver as a rule is not.
Forms of investment
| Form | Ownership | Risk | Note |
|---|---|---|---|
| Physical, allocated | Specific numbered bars belong to the owner | No counterparty risk on the metal | Custody fees; request a bar list |
| Physical, unallocated | Claim to delivery | Counterparty risk of the custodian | Cheaper; in bankruptcy only a claim |
| Physically backed funds and ETCs | Units or debt security | Depends on the structure | Check the prospectus on backing |
| Mining shares, derivatives | Security or contract | Market and company risk | No direct exposure to the metal |
Custody
For larger holdings, a free-port warehouse or a specialised high-security vault is common, often in Switzerland. The contract terms are decisive: ownership of the specific bar, right to delivery, insurance, inspection rights and segregation if the custodian goes bankrupt. A regular bar list with numbers, weight and fineness belongs in the documentation.
Bars of recognised origin – for example under the Good Delivery rules of the London Bullion Market Association (LBMA) – are easier to trade and evidence a checked supply chain.
Valuation and reporting
- Valuation at the market price of the reporting date, usually the LBMA price in USD per troy ounce.
- Conversion into the reporting currency at the same date.
- Keep the holding in troy ounces or grams of fine weight, not only in money terms.
- Record the place of custody, custodian and allocation (allocated or unallocated) for every position.
- Show gold as a separate position in the currency exposure, because it is not tied to any national currency.
Taxes and VAT
Investment gold is exempt from VAT in Switzerland and the EU. Silver, platinum and palladium, on the other hand, are generally subject to VAT unless they remain in a free-port warehouse. Income and capital gains taxation follows the state of residence; in Switzerland, private capital gains are in principle tax-free, but the metal is subject to wealth tax. In individual cases, tax advice is needed.
Care when buying
When selling against cash above certain thresholds, dealers must identify their customers. For the family office the reverse applies: check the origin of the bars, the dealer and the custodian carefully, and keep the purchase documents – they will later also serve as evidence of the source of wealth.
In FLIORE
In FLIORE precious metals are recorded as assets in their own right, with valuation, currency and place of custody, and included in the consolidated wealth overview. Purchase documents, custody agreements and bar lists are stored encrypted in the document vault.
At a glance
| Key distinction | Allocated or unallocated |
|---|---|
| Valuation | Market price at the reporting date, usually USD per troy ounce |
| VAT | Investment gold exempt (CH, EU); silver generally taxable |
Terms on this page
- Source of wealth
- How a person's total wealth came about, for example through entrepreneurship, inheritance or employment.
- Consolidated wealth
- The overall view of a family's wealth across all banks, structures and currencies in one reporting currency.
Frequently asked questions
Is gold in a bank account safe?
That depends on the form. Unallocated gold is a claim against the bank and is not segregated in bankruptcy. Allocated bars belong to the owner and must in principle be handed over in bankruptcy.
How often should the holding be checked?
At least annually against the bar list and a confirmation from the custodian. For large holdings, an independent audit or a right of inspection makes sense.
Does gold count as cash?
Gold is easy to trade but subject to price fluctuations. In reporting it is usually shown as an asset class of its own or under commodities, not as cash.
What should be considered with coins?
Investment coins of a certain fineness count as investment gold. Collector's coins, by contrast, are treated as tangible assets and valued more like art.
Sources
- London Bullion Market Association (LBMA) – Good Delivery and prices
- Directive 2006/112/EC (VAT Directive), special scheme for investment gold – EUR-Lex
- Swiss Federal Tax Administration (FTA) – value added tax
This page provides orientation and does not replace legal or tax advice. The cited legal sources in their applicable version are authoritative.
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