How Capital Gain Tax (CGT) works on Gold bullion?
Important Disclaimer: At Gerrards Bullion, we are not accountants, tax specialists, or financial advisors. The information provided reflects our experience in the precious metals market, but it is not professional tax advice. For guidance tailored to your circumstances, please consult a qualified tax advisor.
What is Capital Gains Tax?
“A tax on the profit when you sell (or ‘dispose of’) something (an ‘asset’) that’s increased in value. It is the gain you make that is taxed, not the amount of money you will receive.”
– The official UK Government website (GOV.UK) page on Capital Gains Tax.
More infos about CGT on
Taxed on Gains: You are taxed only on the profit (the difference between what you paid for an asset and what you sold it for), not the total sale proceeds.
CGT can apply to a wide range of assets, including property, stocks and shares, antiques and collectibles, and investment gold bullion.
Allowances and Exemptions: Every individual is given an annual CGT allowance. If your total gains for the tax year are below this threshold, you do not have to pay CGT. However, gains above the annual allowance are taxed at rates set by HMRC, which may vary depending on both your income tax band and the type of asset disposed of.
How CGT applies to Gold Investment?
Capital Gains Tax (CGT) is a tax you may owe on the profit from selling your gold investment. Here’s how it works in the UK and what gold investors need to know:
When Does CGT Apply to Gold Investments?
- CGT is charged on profit: You are taxed only on the profit (gain) you make when selling your gold, not the total sale proceeds.
- Annual CGT allowance: Each financial year, individuals have a CGT-free allowance. If your total gains from all assets—including gold, property (excluding your main home), shares, land, or antiques—exceeds this threshold, you must pay CGT on the amount over the allowance.
- Threshold for small investors: Many gold investors in the UK never reach the CGT threshold—the level of profit required before CGT is due. For the 2025/26 tax year, the annual CGT exemption is £3,000.
Key Points for Gold Investors
- You are responsible for reporting: The responsibility to declare CGT and pay any tax owed lies with you, not the bullion dealer.
- Keep records: Maintain accurate records of your purchases and sales, including dates and amounts, to calculate potential gains.
- Professional advice: Tax rules can be complex; consult a qualified accountant for guidance tailored to your personal circumstances.
Example 1:
You bought £10,000 in physical gold in 2023. You sell it today for £12,000.
12,000 – 10,000 = £2,000 profit
You will not have to pay Capital Gain Tax since your profit is under the £3,000 limit.
Example 2:
You bought £10,000 in physical gold in 2023. You sell it today for £12,000.
You bought £10,000 of Apple Shares in 2015. You sell it today for £20,000.
(12,000 – 10,000) + (20,000 – 10,000) = £12,000 profit
12,000 – 3,000 = £9,000 of taxable profit.
You will have to pay Capital Gain Tax only on the profit over the £3,000 limit.
What is the percentage (%) of CGT that I will pay?
The Capital Gains Tax rate you will pay depends on your taxable income and the type of asset you are selling.
According to the latest information from HMRC and relevant government sources for the 2025/26 tax year:
- If your total taxable income plus gains (after deducting the personal allowance and CGT annual exempt amount) falls within the basic Income Tax band, you will pay 18% CGT on your gains.
- If your combined taxable income and gains exceed the basic rate band and you fall into the higher or additional rate Income Tax band, you will pay 24% CGT on the portion of your gains above the basic rate limit.
More infos from the HM Revenue & Custom Website below:
How to minimize CGT on gold when re-selling?
Choose CGT-Free Gold Products
- Buy CGT-exempt gold coins: In the UK, gold Sovereigns and gold Britannias are classed as legal tender. Profits from selling these coins are exempt from Capital Gains Tax (CGT), regardless of the gain or value.
- Other coins and bars: Most other gold coins and all gold bars do not enjoy this exemption. Selling these may result in a CGT liability if your gains exceed the annual allowance.
Strategies to Minimize CGT on Taxable Gold
- Maximize annual CGT allowance: Every UK resident has a tax-free CGT allowance each year (known as the annual exempt amount). Consider timing your sales so that your gains in any single tax year do not exceed this allowance.
- For example, if you plan to realize large profits, stagger sales across multiple tax years to keep each year’s gains within the CGT threshold.
- Partial sales: Break up your gold holdings into smaller portions before selling. This allows you to sell part of your investment in one financial year and the remainder in another, further optimizing your use of the annual CGT allowance.
- Purchase smaller units: Buying smaller gold bars or coins increases your flexibility, making it easier to sell incrementally.
- Offset losses: If you have sold other assets at a loss during the year, these losses can offset gains on your gold, thereby reducing (or eliminating) your CGT liability.
- Monitor gold price movements: The value of your remaining gold may change after each sale, so keep an eye on market prices, as future sales could result in different gains or losses.
Example
If you purchased £10,000 worth of gold coins in 2020 and their value increased to £20,000 by 2025:
- Sell half (£10,000) in one financial year and realize a portion of the gain tax-free (assuming it’s within your annual CGT allowance).
- Sell the remaining half in the following financial year, again using that year’s CGT allowance.
Remember: The gold price can fluctuate, so your future gains or losses might change depending on market conditions at the time of sale.
You can also look at our range of CGT Free Gold Coins
