The essentials

Investment-grade gold enjoys a special place in UK tax law: most bullion bars and qualifying coins are exempt from VAT, cutting the upfront cost compared with other metals like silver, platinum, and palladium, which are typically charged at 20% VAT when delivered in the UK. Capital Gains Tax applies to profits on disposal above the annual allowance, but UK legal-tender coins from The Royal Mint – Britannias and Sovereigns – are exempt from CGT for individuals, a key reason they dominate UK portfolios.

VAT explained

VAT usually adds 20% to most purchases in the UK, and that includes physical silver and platinum bullion delivered domestically; gold is the exception when it qualifies as “investment gold” under HMRC criteria. HMRC’s guidance confirms VAT exemption for investment-grade gold bars of at least 99.5% purity and listed investment gold coins, which covers modern bullion-standard issues like Britannias and many Sovereigns by specification and listing. This structural VAT difference is why many UK buyers prioritise gold for core holdings, while treating silver and platinum as tactical or longer-horizon positions where VAT’s impact can be amortised over time.

CGT fundamentals

CGT is charged on the gain realised when selling an asset, after deducting the annual allowance and any allowable costs, with rates depending on overall taxable income; precise rates and thresholds are updated each tax year by HMRC. Crucially, UK legal-tender coins produced by The Royal Mint – Gold and Silver Britannias and Sovereigns – are exempt from CGT for individuals, meaning gains on disposal aren’t chargeable regardless of size. Non-UK coins such as Krugerrands, Eagles, and Maples, and all bars, are not CGT-exempt, so gains above the allowance can be taxable on disposal.

Why Britannias and Sovereigns shine

Britannias and Sovereigns combine two advantages: VAT efficiency on gold at purchase and full CGT exemption at sale due to legal-tender status, creating a uniquely tax-efficient lifecycle for UK investors. Silver and platinum Britannias share the CGT exemption on exit, though buyers should expect 20% VAT on UK delivery, which many investors plan for by focusing on low-premium coins and longer holding periods to offset the entry tax over time. NB. Alternatively, they can be purchased VAT free from Gerrards Bullion by taking advantage of our secure storage facilities in Switzerland

Coins versus bars

Bars often have slightly lower premiums per gram or ounce at purchase, which is attractive for cost-sensitive buyers building weight efficiently, especially in gold where VAT isn’t charged if the bar is investment-grade. However, bars do not benefit from CGT exemption, so a rising market can turn the initial premium saving into a higher net tax cost at exit compared with CGT-free UK legal-tender coins. For many, the lifecycle economics favour coins for long-term holdings and bars for tactical accumulation where anticipated gains are modest or can be offset against losses.

Practical strategies

A common approach is to anchor core positions with Gold Britannias and Sovereigns to combine VAT exemption with CGT-free disposals, then add selective bars for premium efficiency where appropriate to objectives and risk tolerance. For silver, investors often use Silver Britannias for the CGT-free exit but plan carefully for the 20% VAT at purchase, sometimes consolidating orders to reduce per unit costs and focusing on low premium issues to improve the total return profile. Across all formats, meticulous record-keeping – dates, quantities, unit costs, and fees – supports accurate gain calculations and smarter disposal timing across tax years to use available allowances.

Common misconceptions

Not all coins are CGT-free; only UK legal-tender coins such as Britannias and Sovereigns qualify for the exemption, while popular non-UK bullion coins do not. Pre-owned versus new does not change VAT treatment for investment gold or for UK-delivered silver; gold that meets HMRC’s investment criteria remains VAT-exempt, while silver remains standard-rated at 20% when delivered domestically. Proof and collectible versions of UK legal-tender coins still benefit from the CGT exemption, but higher premiums and collector dynamics may affect resale outcomes versus standard bullion.

Key takeaways

The UK’s tax framework rewards aligning product choice with VAT and CGT treatment, with Gold Britannias and Sovereigns offering a uniquely efficient combination for longterm holdings. Silver and platinum Britannias benefit from CGTfree disposals, but buyers should budget for VAT at purchase if UK delivery is required and plan accordingly for holding period and premiums. Bars can be compelling at entry on premiums, yet the absence of CGT relief means modelling totallifecycle outcomes is essential before favouring bars over CGTexempt UK coins for larger or longerterm positions; tax rules and personal circumstances can change, so uptodate HMRC guidance and professional advice are prudent for significant transactions

Disclaimer: Investments in bullion products are not FCA regulated. The value of your investment can go down as well as up. Past performance is not indicative of future performance.