Sprott Physical Bullion Trusts
Tax Guide
2023 PFIC Annual Information Statements
PFIC (Passive Foreign Investment Company) Annual Information Statements related to a U.S. investor’s Qualified Electing Fund (“QEF”) election for the year ended December 31, 2022, are available below:
- Sprott Physical Gold and Silver Trust: PFIC Form 2023
- Sprott Physical Gold Trust: PFIC Form 2023
- Sprott Physical Silver Trust: PFIC Form 2023
- Sprott Physical Platinum and Palladium Trust: PFIC Form 2023
- Sprott Physical Uranium Trust: PFIC Form 2023
See individual Trusts pages for PFIC statements from past years
- Sprott Physical Gold and Silver Trust
- Sprott Physical Gold Trust
- Sprott Physical Silver Trust
- Sprott Physical Platinum and Palladium Trust
- Sprott Physical Uranium Trust
Download Brochure - PDF Version: 2023 Tax Guide for U.S. Investors (Sprott Physical Bullion Trusts)
Download Brochure - PDF Version: 2023 Tax Guide for U.S. Investors (Sprott Physical Uranium Trust)
The Sprott Physical Bullion Trusts potentially provide favorable tax advantages versus owning metals directly or precious metals ETFs.
| Tax Treatment if Held Over 1 Year |
Sprott Physical Bullion Trusts* 15% or 20% Taxed at capital gains tax rate** |
Precious Metals: Coins, Bullion, ETFs 28% Taxed at collectibles tax rate |
| * | Requires the timely filing of a QEF form for your tax return. |
| ** | 15% long-term capital gains tax rate for single filers; 20% long-term capital gains tax rate for married filers. |
Download Flyer - PDF Version: A Less Taxing Way to Own Precious Metals
How are precious metals taxed? The IRS considers precious metals to be collectibles like art, rare books and fine wine. Provided you hold it for more than 1 year, the capital gains tax on your net gain from selling a collectible is 28%. This level of tax is considerably higher than the tax rate on most net capital gains, which is an average of 15% for most taxpayers, according to the IRS.1 If you sell a collectible in less than one year, the proceeds will be taxed as ordinary income.
Special U.S. federal income tax rules apply to holders of the Sprott Physical Bullion Trusts because they are classified as Passive Foreign Investment Corporations (PFICs) by the IRS. If a U.S. non-corporate holder makes a timely QEF election each year by filing IRS Form 8621 with their federal income tax return, it will generally mitigate the otherwise adverse U.S. federal income tax consequences of owning precious metals via coins, bullion or ETFs. Capital gains will be taxed at either 15% or 20% depending on the holder’s specific personal situation. For U.S. investors who purchase and sell PHYS in less than one year, short-term capital gains will be treated as ordinary income and will be taxed 10% to 37% depending on income level.
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The information provided is general in nature and is provided with the understanding that it may not be relied upon as, nor considered to be, the rendering or tax, legal, accounting or professional advice. Readers should consult with their own accountants and/or lawyers for advice on the specific circumstances before taking any action. |
†The Trusts are closed-end funds established under the laws of the Province of Ontario in Canada and are available to U.S. investors by way of listings on the NYSE Arca pursuant to the U.S. Securities Exchange Act of 1934. The Trusts are not registered as investment companies under the U.S. Investment Company Act of 1940.
Important Dislosures
Sprott Physical Bullion Trusts
Sprott Physical Bullion Trusts (the “Trusts”) are closed-end funds established under the laws of the Province of Ontario in Canada. The Trusts are available to U.S. investors by way of listing on the NYSE Arca pursuant to the U.S. Securities Exchange Act of 1934. The Trusts are not registered as investment companies under the U.S. Investment Company Act of 1940.
The Trusts are generally exposed to multiple risks that have been both identified and described in each Fund’s prospectus, which can be found here: Sprott Physical Gold Trust, Sprott Physical Silver Trust, Sprott Physical Gold and Silver Trust and Sprott Physical Platinum and Palladium Trust.
Please refer to each Fund’s prospectus for a description of these risks. Relative to other sectors, precious metals and natural resources investments have higher headline risk and are more sensitive to changes in economic data, political or regulatory events, and underlying commodity price fluctuations. Risks related to extraction, storage, and liquidity should also be considered.
Gold and precious metals are referred to with terms of art like store of value, safe haven, and safe asset. These terms should not be construed to guarantee any form of investment safety. While “safe” assets like gold, Treasuries, money market funds, and cash generally do not carry a high risk of loss relative to other asset classes, any asset may lose value, which may involve the complete loss of invested principal.
All data is in U.S. dollars unless otherwise noted.
Past performance is not an indication of future results. The information provided is general in nature and is provided with the understanding that it may not be relied upon as, nor considered to be tax, legal, accounting or professional advice. Readers should consult with their own accountants and/or lawyers for advice on their specific circumstances before taking any action. Sprott Asset Management LP is the investment manager to the Trusts. Important information about the Trusts, including the investment objectives and strategies, applicable management fees, and expenses, is contained in each Fund’s prospectus. Please read the prospectus carefully before investing. The indicated rates of return are the historical annual compounded total returns including changes in unit value and reinvestment of all distributions and do not take into account sales, redemption, distribution or operational charges or income taxes payable by any unitholder that would have reduced returns. You will usually pay brokerage fees to your dealer if you purchase or sell units of the Trusts on the Toronto Stock Exchange (“TSX”) or the New York Stock Exchange (“NYSE”). If the units are purchased or sold on the TSX or the NYSE, investors may pay more than the current net asset value when buying units of the Trusts and may receive less than the current net asset value when selling them. Investment funds are not guaranteed, their values change frequently and past performance may not be repeated. The information contained herein does not constitute an offer or solicitation to anyone in the United States or in any other jurisdiction in which such an offer or solicitation is not authorized.