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Outdated 1911 law changes.
Wow. This is good news! We can now own legally gold bars. Until now, South Africans were allowed to own jewelry and gold coins. Before last Saturday, owning a gold bar was a criminal offence. Big Brother knows what is best for you (and them!). With the purchase, one pays 14% VAT , as is the case with jewelry, However, Krugerrands are zero-rated for VAT but expect a mark-up of app 7-9% (which is 5% for Rand Refinery and 2-4% for the gold coin trader) on the net gold price.
The advantage of the Krugerrand is of course that it is the biggest gold coin brand in the world (more Krugerrands have been sold than all other gold coins in the world together), they are easily recognisable and can therefore there should be no problems with selling these coins.
Law change means you can own gold bars July 11, 2009
By Bruce Cameron, Personal Finance
You can now own gold bars for the first time since 1911. Until now, you were limited to gold jewellery or gold coins, which are often sold at outlandish prices.
The ownership by individuals of unwrought gold and gold bars was restricted in 1908 in terms of the Transvaal Precious and Base Metal Act, and this legislation was placed on the statute books of the Union of South Africa in 1911. This was reinforced in 1967 with the Mining Rights Act, which made it a criminal offence to be in possession of unwrought gold.
Unlicensed South Africans could own gold only in the form of jewellery and coins.
This changed in 2005 when Parliament approved the Precious Metals Act, permitting the manufacture of minted bars.
Bernard Stern, the chief executive of precious metal refiner Metal Concentrators, says his company applied for a permit to produce precious metal bars last year. Permission was granted last month by the precious metals regulator after consultation with the Reserve Bank.
"We are licensed to produce 20 000 troy ounces of gold in 10g, 50g and 100g bars, and 2 000 ounces of platinum in one-ounce bars," Stern says.
He says the 100g bars will carry a premium of five percent above the gold spot price, and the 10g bars will have a premium of eight percent.