With the demise of SGG and in the absence of other stamp “investors”, there is a certainty that if the owners of SGG portfolios decide to sell their stamps on the open market in an uncontrolled manner, that prices will drop significantly from current levels that are already under pressure. Our advice to investors is therefore not to sell their stamps yet.
However, with the investment portfolios being held in Guernsey, outside of the European Union’s VAT regime, clients residing in the EU (including the United Kingdom) will have to pay VAT to take possession of their stamps. Unfortunately, in the most likely scenario, the amount of VAT charged would be determined by the purchase price paid for the stamps instead of their current market value. While import VAT for items imported in the UK for sale within 2 years may have a reduced rate of 5% applied, items held in storage for longer than 2 years may incur normal-rated VAT of 20%. Needless to say these charges would have an additional negative impact on any net return on investment.
Consequently, it is our additional advice that investment portfolios be held outside of the European Union until such time that stamp prices are able to strengthen, and with a partner with a proven track record in selling to and from collectors.
As with all markets of tradeable items, the prices of stamps and other so-called “emotional assets” do indeed fluctuate, and investors should be wary of suggestions of almost certain returns from companies with vested interests in selling them items from their inventory at moderate discounts to catalogue prices.