If you are thinking about buying gold in the UK, it is important to understand how tax works. One of the biggest advantages of investing in gold is that in many cases you do not have to pay VAT or Capital Gains Tax (CGT). Knowing the rules helps you buy smarter and avoid surprises when it comes time to sell.
Do You Pay VAT on Gold?
The good news is that most investment gold is exempt from VAT in the UK. This applies to:
- Gold bars of at least 99.5% purity
- Gold coins of at least 90% purity that are traded at or close to their gold value
This means when you buy bullion coins like Sovereigns, Britannias, or Krugerrands, or investment-grade bars, you do not pay any VAT.
Exceptions:
- Jewellery is subject to VAT because it is sold as a finished product, not investment gold.
- Rare numismatic coins can sometimes carry VAT if sold mainly for collectable value rather than gold content.
Capital Gains Tax (CGT) on Gold
CGT is a tax you pay on profit when selling certain assets. In the case of gold:
- UK legal tender coins (Sovereigns and Britannias) are exempt from CGT. This means if you buy and later sell them at a profit, you keep all of the gain.
- Other coins and bars are subject to CGT if your gains go above the annual allowance. For the 2025/26 tax year, the allowance is £3,000.
This is why many UK investors prefer Sovereigns and Britannias — they are simple, tax-free, and easy to sell.
Examples
- You buy £5,000 worth of Sovereigns and sell them later for £7,000. No CGT is due, no matter how much profit you make.
- You buy £20,000 worth of gold bars and sell them for £25,000. If your total gains across all assets exceed £3,000 in that tax year, you may owe CGT on the excess.
Inheritance Tax
Another point to be aware of is inheritance tax. Gold counts as part of your estate, so it may be taxed if your estate is above the threshold. Planning ahead and seeking advice is wise if you intend to pass gold on to family.
Keeping Records
If you buy gold that is not CGT exempt, keep good records of what you paid and when. This makes it easier to work out if tax is due when you sell.
FAQs About UK Gold Taxes
Is all gold VAT free?
No. Only investment gold bars and coins are exempt. Jewellery and collectable coins may still carry VAT.
Why are Sovereigns and Britannias tax free?
Because they are legal UK tender, so HMRC exempts them from Capital Gains Tax.
Do I need to tell HMRC if I sell gold?
Only if your gains exceed the CGT allowance and the gold you sold is not exempt (like non-UK coins or bars).
Can I gift gold without paying tax?
Yes, but if the value of your estate is over the inheritance tax threshold, it may be considered as part of your estate later.
Final Thoughts
The UK tax system is very favourable to gold investors. Most bullion purchases are VAT free, and coins like Sovereigns and Britannias are completely exempt from Capital Gains Tax. By understanding the rules and keeping simple records, you can buy and sell gold with confidence, knowing you are investing in one of the most tax-efficient assets available in the UK.
Leave a Reply