Supose I bought 1 Kg of gold at todays current price of circa £11/gram. (£11,000)
1 gram of gold would buy me 11 loaves of bread assuming bread is £1 / loaf.
Fast forward a few years and assume we have undergone a period of runaway inflation.
Bread is now £50 a loaf!
However 1 gram of gold will still buy me 11 loaves of bread. (1gram of gold in now £550 / gram).
My kilo of gold bought for £11,000 is now worth £550,000!
Gordon want to charge me capital gains tax on my £539,000 "profit"
At 40% allowing for the 8K allowance this would be a bill of around £212,400.
But in reality I have made zero profit, the gold I bought a few years ago is still worth exactly what I paid for it ie 11,000 loaves of bread. However Gordon would have effectively stolen 4248 loaves of bread.
i.e. my £11,000 investment is now worth £6752 in real terms
Is there anyway to prevent being robbed by the govt. in this way?
I don't really want to start buying gold coins on ebay and storing them under my mattress