It is important to know when considering potential CGT and VAT implications on different precious metals that you may acquire. Again this information below is not advice, and you should seek support from regulated investment professionals.

Investment Gold

Investment quality gold also benefits from being VAT exempt and certain gold coins are free of capital gains tax which can be appealing for investors of larger sums. The variety of Gold coins being minted around the world also appeals to the collectors market, which enjoys the benefits of combining an investment with a hobby and learning the interesting background to the many different gold bullion coins available from around the world.

Gold is typically seen as a more suitable investment for larger sums of money and due to the high price per ounce large sums can easily be invested into small quantities of Gold which require less physical space for storage.


 CGT Explained

If you have any further questions with regards Capital Gains Tax then please seek advice from your accountant or visit the HMRC website for full details. Please also note that UK Bullion is not responsible for any of its customer's CGT or accounts, and does not volunteer or declare its customers information. That means that each investor that purchases bullion from UK Bullion is responsible to work out his or her own CGT liability and to declare any CGT payable. All information provided derives from as interpreted by us but we advise all customers to ensure that they read the aforementioned HMRC guide to Capital Gains Tax.

Extract from HMRC Capital Gains Tax Advice on Currency: CG78307 Foreign currency: coins: legal tender.

Typically, UK legal tender gold and silver bullion coins come with the benefit of being CGT Free. Gold Sovereigns minted in 1837 and later years and Gold and Silver Britannia coins are currency but, like all sterling currency, are exempt because of TCGA92/S21 (1)(b). This means that our Gold Half Sovereigns, Gold Full Sovereigns, Gold Britannia and Silver Britannia Coins are all CGT Free and any profits realised from the sale of these items remain unaffected by CGT making them cost effective collectibles. Coins therefore are only to be regarded as currency only if they are legal tender at the time of their acquisition or disposal. Coins which are currency but not sterling, for example Krugerrands, are chargeable assets.

Bullion is a term applied to bulk quantities of a Precious Metal which can take the form of bars, coins and rounds.

  • Investment Gold Bars or Wafers are exempt from VAT provided that they have a Gold purity of at least 995 parts in 1000.
  • Gold Coins are exempt from VAT provided that they were minted after 1800 with a Gold purity of at least 900 parts in 1000. Such coins must be or have been legal tender in their country of origin and are normally sold at a price that does not exceed 180% of the value of the Gold contained in the coin. Exemption from Capital Gains Tax is given to UK Investment Gold Coins such as the Sovereign and Britannia which have a face value and are therefore legal tender.
  • Investment Gold Rounds may appear to be coins but because they have never been legal tender, most being produced by private mints, they are categorized in the same way as bars and wafers.
  • Investment Silver may be bought as bars, wafers, rounds or coins but is always subject to VAT when bought in the UK. UK Investment Silver coins such as the Silver Britannia are Capital Gains Tax free.
  • Gold and Silver Jewellery may be seen as investments but are generally a very expensive way to buy Gold and Silver due to high labour and production costs and the addition of VAT however it is more discrete which may be more suitable for an economic disaster scenario when trading.


Extra Considerations when purchasing Silver 

 Your decision to invest in Silver will depend on your personal appetite for risk. Although Silver has many of the same product types available as Gold however it typically has a far lower value meaning that storage issues can arise when looking to invest large sums of money into Silver due to its enlarged footprint. Nevertheless the benefit is that you have additional inventory to trade for every day scenario in a difficult economic scenario. The price of Silver is somewhat more volatile than Gold making it more suitable for investors who are more open to risk. Silver can yield high returns but also lose value rapidly. Many investors choose a mix of Gold and Silver to minimise their exposure to risk but also attempt to take advantage of the price swings that Silver can experience. 


CGT Implications

Capital Gains Tax (CGT) is a tax that may be levied upon the profit of a sale, donation, or any other disposal of an item. Bullion, as well as shares and property, is affected by this tax. It is important to remember that CGT only applies to profit generated over a certain threshold. This threshold does differ from year to year, and is often referred to as the Annual Exempt Amount (AEA).

CGT applies exclusively to the difference between the original purchase value of the items and the value when they were sold/disposed of, where this value exceeds the AEA. This tax is taken into consideration on every valid asset disposed of but is only payable at the end of the tax year on your overall gains above the AEA.

If you need help working CGT on your portfolio we work with partners who can assess your bullion collection. Partnering with regulated investment professionals is necessary to ensure that you receive the correct investment advice.