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Capital Gains Tax on Gold Bullion

Do you have to pay Capital Gains Tax on gold bullion? Like anything to do with tax, there is no simple ‘yes’ or ‘no’ answer!

What is Capital Gains Tax?

Capital Gains Tax (CGT) is the tax payable on the gain incurred when you sell an asset.  You do not pay CGT on the total amount you sell the asset for, only the gain made upon sale of the asset is taxable. Examples of where it is typically applied would be the sale of second homes, stocks, businesses and gold and silver bullion.

Do I pay CGT on gold bullion?

You do pay CGT on gold and silver bullion, however gold and silver coins that are legal tender such as one ounce Britannia Coins and gold sovereign coins are exempt. 

This means that you will only pay CGT when you sell your gold and silver bullion and only then on gains that are over that particular tax year’s threshold. 

It is also worth remembering that you do not pay VAT on investment gold, it is currently exempt. 

Buy CGT-free gold 

As they are British coins denominated in pounds Sterling, one ounce Britannia coins and gold sovereign coins are CGT exempt. They are classed as legal currency and so CGT is not chargeable. Any coins produced by the Royal Mint are classed this way. 

This means that if you hold coins classed as legal tender then you are able to make unlimited-profits, tax-free. 

Any gold and silver which is not classed as legal tender in the United Kingdom is CGT liable. For example a South African Krugerrand or American Gold Eagle would both be liable to CGT as they are not legal tender in the UK. 

Do I pay CGT on the gold in my SIPP?

Any gold that is held as part of your SIPP or SSAS is not CGT liable. SIPP and SSAS pensions benefit from the same benefits afforded by HMRC to any other pension scheme. 

This means that if you currently hold gold in your SIPP and choose to sell it at a profit, you will not be liable to pay CGT.

How does CGT work?

CGT is taxed at different rates to income tax. But your personal tax rate does determine how much CGT you will pay. 

At the time of writing the UK’s CGT threshold is £12,300. This means an investor can make up to this amount of profit from the sale of one or more assets before they must pay CGT. The amount of CGT you pay depends on your personal tax rate and the type of asset you have sold. 

Property is treated differently to other assets. For gains made on the sale of assets that are not property, basic-rate taxpayers will pay 10% and higher-rate taxpayers will pay 20%. This is on profits above the £12,300 threshold.

In the United Kingdom the CGT gains threshold must be used in the same tax year i.e. it cannot be carried forward. However any losses can be rolled forward indefinitely and ultimately offset against any gains, thus potentially reducing the CGT burden.     

When investing in gold, how can I reduce my CGT liability?

The simple answer would be to buy gold, silver and platinum coins produced by the Royal Mint such as one ounce Britannias and gold Sovereigns as they are legal tender and so CGT-exempt. 

However, many investors like to diversify within their gold holdings and prefer to hold both gold bullion bars and coins. If this is the case then it is worth keeping the following in mind:

  • you only pay Capital Gains Tax on gold on gains above that particular tax year’s CGT threshold. 
  • CGT is only due on any gains made, not on the total amount the gold bullion was sold for. 
  • If you incurred any (eligible) losses in previous years then you are able to roll them forward and offset them against any gains. 
  • If you are married and share the asset, then you can combine your CGT allowance. 

It is your responsibility as an investor to declare any CGT payable. GoldCore is not a tax advisory service and would recommend consulting with  a tax expert prior to making any investment decisions based on tax liabilities.