Gold Bullion Tax UK
There are a few tax laws regarding precious metals in the UK that you should be aware of when making any gold or silver bullion investment.
Gold and silver bullion are subject to capital gains tax in the UK.
What is capital gains tax?
Capital gains tax is essentially a tax on the profit you make when you sell (or give away) an asset that has increased in value.
The tax is only due when you sell and realise the profit. These assets could include investment property, shares, antiques as well as precious metals.
Every UK resident has a capital gains tax allowance annually. As an individual you are currently allowed an allowance (2020-21) of £12,300 net across all investments in a tax year before being liable for capital gains tax. Always check with a qualified financial adviser or HMRC for up to date information.
Any gains over your individual allowance is subject to capital gains tax at current HMRC rates.
Interestingly, capital gains tax is exempt on UK legal currency.
This means that specific UK gold and silver coins, such as the Gold or Silver Britannia and Gold Sovereigns, are capital gains tax free no matter how many of these coins you have and their value.
VAT. Value Added Tax.
In the UK, silver bullion is subject to VAT (currently 20% 2020).
There is currently no VAT charged for gold bullion, but remember that you are liable for any capital gains tax.
Can you avoid paying capital gains tax on gold?
Investors in gold bullion can choose to invest in smaller units of gold coins and gold bars. This gives the advantage of being able to sell smaller quantities of bullion over a financial year and keeping within the annual capital gains tax threshold.
Specific gold coins such as the British Gold Britannia and Gold Sovereigns, have the unique advantage of being capital gains tax exempt.
Bullion/Investment gold.
Investment gold is either:
- gold of a purity not less than 995 thousandths that is in the form of a bar, or a wafer, of a weight accepted by the bullion markets.
(b) a gold coin minted after 1800 that is:
• of a purity of not less than 900 thousandths
• or has been, legal tender in its country of origin
• of a description of coin that is normally sold at a price that does not exceed 180 per cent of the open market value of the gold contained in the coin
(Source: HMRC).
It is always the responsibility of you the investor to declare any capital gains tax payable to HMRC.
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