Tax rules on buying and selling gold and silver bullion in the UK
(For general information only – not personal tax advice.)

1. Overview: how the UK taxes gold and silver bullion

In the UK, different taxes can apply when you buy or sell gold and silver:

• VAT (Value Added Tax) – mainly an issue when you buy silver or non‑investment gold.
• Capital Gains Tax (CGT) – relevant when you sell bullion at a profit.
• Income Tax – may apply if you are trading bullion as a business, not investing as an individual.
• Inheritance Tax (IHT) – can apply to the value of your bullion when you pass away or make certain lifetime gifts.

Key points:

• Many forms of investment‑grade gold are exempt from VAT in the UK.
• Silver bullion and most non‑investment gold products are subject to VAT.
• UK legal tender coins (such as Britannias and some Sovereigns) are exempt from CGT for UK residents.
• Gold and silver bars, foreign coins and rounds can be subject to CGT when sold at a profit.
• If you regularly buy and sell bullion as a business, your profits may be taxed under Income Tax / Corporation Tax, not CGT.

We will go through each of these in detail.

2. VAT on gold and silver bullion

2.1 VAT on gold: investment vs non‑investment

The UK follows EU‑derived rules on “investment gold”, which enjoy a VAT exemption.

Investment gold is generally:

1. Gold bars or wafers

• Of a fineness of at least .995 parts per 1000 (i.e. at least 99.5% pure),
• And of a weight accepted by bullion markets (for example 1 oz, 100 g, 1 kg, etc.).

1. Gold coins that meet all of the following criteria:

• A fineness of at least .900 parts per 1000 (e.g. 22 carat like Sovereigns at about 91.67% pure, or 24 carat like Britannias at 99.99%).
• Minted on or after 1800.
• Legal tender in their country of origin.
• Normally traded at a price that does not exceed the open market value of their gold content by more than a modest premium (HMRC uses specific technical criteria here).

Coins that meet these criteria are classed as investment gold coins and are VAT‑exempt in the UK.

Examples of gold products that are usually VAT‑free in the UK:

• UK Gold Britannia coins (legal tender, 1 oz and fractional sizes).
• UK Gold Sovereigns (new and most older issues).
• Many popular international bullion coins:
• Krugerrand (South Africa)
• Maple Leaf (Canada)
• American Eagle (USA, for investment‑grade bullion issues)
• Australian Kangaroo / Nugget, etc.
• Gold bars from recognised refiners (e.g. LBMA‑approved) of 99.5% purity.

As a UK bullion dealer, when I sell qualifying investment gold to UK customers:

• No VAT is charged on the sale price.
• You simply pay the bullion price plus any dealer premium, shipping and (if applicable) card/insurance fees, but no VAT element.

Non‑investment gold and VAT

Not all gold items qualify as investment gold. Examples that may attract VAT:

• Some collector or numismatic coins with high premiums and/or not meeting the strict criteria above.
• Gold jewellery.
• Very small bars or novelty “gold notes” that are not considered accepted bullion shapes or weights.
• Some proof or commemorative coins marketed more as collectibles (depending on their characteristics and HMRC’s view).

In practice:

• Purely bullion‑type gold bars and mainstream bullion coins are usually VAT‑free.
• Niche, collectible or jewellery‑like products can be subject to VAT at the standard rate.

If you are unsure whether a particular product is classed as investment gold, ask the dealer directly; reputable UK dealers will clearly label items as VAT‑free or VAT‑applicable.

2.2 VAT on silver bullion

Unlike investment gold, silver does not benefit from the same broad VAT exemption in the UK.

• Silver bullion bars and silver bullion coins are generally subject to VAT at the standard rate when sold within the UK.
• This applies irrespective of whether the silver is in bar form, rounds, or legal tender coins.

So, when you buy silver bullion from a UK dealer:

• The price you pay usually includes 20% VAT (or the prevailing standard UK rate).
• Some dealers will show prices inclusive of VAT, others will break out the VAT line clearly.

VAT margin schemes

Some dealers occasionally sell silver under a margin scheme, particularly for second‑hand silver. Under these schemes:

• VAT is charged only on the dealer’s margin rather than the full selling price.
• However, you as a private individual still cannot reclaim any VAT, and from your perspective, the displayed price is simply the price you pay.

This can make second‑hand silver slightly more tax‑efficient to purchase than brand‑new silver, but VAT is still a factor.

2.3 VAT for non‑UK buyers buying from a UK dealer

If you are:

• An overseas customer (for example, you’re resident in the EU or outside Europe), and
• The bullion is shipped directly out of the UK to your overseas address,

then:

• Investment gold remains VAT‑free.
• Silver and non‑investment gold might be zero‑rated for UK VAT if properly exported, but local import VAT or duties may become payable in your own country.

As a UK dealer, we typically:

• Do not charge UK VAT on qualifying exports when the rules are met.
• But you are responsible for any import taxes, VAT, customs duties or fees charged by your country’s authorities.

It is always wise to check your local rules before arranging overseas delivery.

3. Capital Gains Tax (CGT) on bullion profits

VAT deals with purchase tax. Capital Gains Tax (CGT), in contrast, applies when you sell an investment at a profit.

Bullion can be treated as a capital asset, like shares, property (other than your main home), or other investments.

3.1 When CGT applies

CGT can apply if:

• You are a UK resident individual, and
• You sell bullion or coins for more than you paid, creating a gain, and
• Your total gains (across all assets for the tax year) exceed the annual CGT allowance or you otherwise have a CGT liability.

The UK CGT allowance (Annual Exempt Amount) has been reduced significantly in recent tax years. You should check HMRC’s current rates and thresholds, as they can change almost annually.

General structure:

• You first calculate your gain:
  Gain = Sale Proceeds – Allowable Costs
• Allowable costs typically include:
• Original purchase price of the bullion.
• Certain transaction costs (e.g. dealer premiums as part of purchase price, some delivery/insurance costs related to acquisition or disposal).
• You then add this gain to your other gains for the year.

If your total taxable gains exceed your annual allowance, you may pay CGT at:

• A basic rate for individuals whose total income and gains fall within the basic rate band.
• A higher rate for those whose income plus gains fall into higher or additional rate bands.

(Exact percentages can change; check HMRC for current figures.)

3.2 UK legal tender coins and CGT exemption

One of the most important and often misunderstood benefits for UK investors is the CGT exemption for UK legal tender coins.

• Coins that are legal tender in the UK (such as modern UK Gold Britannias and Sovereigns, and their silver and platinum counterparts) are treated by HMRC as “currency”, not chargeable assets for CGT.
• As a result, profits on the disposal of UK legal tender coins by individuals are generally exempt from CGT.

For example:

• You buy 100 × 1 oz Gold Britannia coins.
• Over several years, the gold price rises sharply.
• You sell the entire holding at a substantial profit.
• No CGT is due on these gains for a UK resident individual because Britannias are UK legal tender.

This is a key reason many of our UK clients choose:

• Gold Sovereigns
• Gold Britannias
• Silver Britannias
• Other UK Royal Mint bullion coins that are legal tender

as their primary bullion investments.

What counts as UK legal tender?

Typically:

• Gold Sovereigns and Half‑Sovereigns (modern and most historic issues still recognised as legal tender).
• Gold Britannias (all standard bullion issues, 1 oz and fractional).
• Silver Britannias.
• Other Royal Mint bullion coins with a face value in GBP and explicitly recognised as legal tender, such as some Lunar or Queen’s Beasts series when minted as UK legal tender.

However, not every coin produced by the Royal Mint automatically qualifies; proof, commemorative or collector coins are usually still legal tender, but the CGT exemption is tied to the legal tender status itself, not to whether they are proof or bullion. That said, price and marketability may differ substantially.

If in doubt, check:

• That the coin denominates value in GBP (e.g. “2 POUNDS”, “100 POUNDS”) and
• That it is described as UK legal tender by the Royal Mint or HMRC accepted lists.

3.3 CGT on foreign coins, rounds, and bars

By contrast, most foreign bullion coins, rounds and bars:

• Are not UK legal tender, therefore
• Are subject to CGT if sold at a profit.

Examples:

• Krugerrands (South Africa).
• Maple Leafs (Canada).
• American Eagles (USA).
• Generic silver rounds with no legal tender status.
• Gold and silver bars (regardless of brand).

In these cases, if you sell at a profit:

1. Work out the gain per disposal.
2. Add your bullion gains and losses to your other capital gains/losses for the year.
3. Offset losses where possible.
4. If net gains exceed the CGT allowance, tax may be payable at the relevant rate.

3.4 Record‑keeping for CGT

Whether your bullion is CGT‑exempt or not, keeping good records is essential. We recommend you retain:

• Invoices and receipts for all purchases:
• Date of purchase.
• Type of product (e.g. “1 oz Gold Britannia 2024”).
• Quantity.
• Total cost including premiums and transactional fees.
• Invoices/receipts for sales:
• Date of sale.
• Quantity and type sold.
• Sale proceeds after any selling fees.

For CGT‑exempt coins (e.g. UK legal tender):

• These records demonstrate that you have been holding exempt assets, which can be helpful if HMRC ever queries your tax return or wealth position.

For CGT‑liable assets (e.g. bars, foreign coins):

• Detailed records allow you to accurately calculate gains and offset losses (for example, if some silver bars are sold at a loss while other assets are sold at a profit).

We are happy to supply duplicate invoices or transaction summaries to our clients on request, but the ultimate responsibility for keeping tax records rests with you.

4. When bullion becomes “trading stock”: Income Tax vs CGT

The tax treatment differs depending on whether you are:

• A private investor, or
• Effectively running a trading business in bullion.

4.1 Private investor

Most individuals who:

• Buy bullion infrequently,
• Hold it for medium or long‑term wealth preservation, and
• Sell it only occasionally,

are generally treated as investors. For them:

• Capital Gains Tax rules apply (or CGT exemption for UK legal tender coins).
• They do not pay Income Tax on bullion gains, assuming their activities are not deemed trading.

4.2 Trading in bullion as a business

If, however, you:

• Buy and sell bullion frequently and with the intention of short‑term profit,
• Operate in a way similar to a dealer (e.g. actively marketing, holding inventory, flipping stock quickly),

HMRC may view your activities as a trade.

In that case:

• Any profit would be taxed under Income Tax (if you are a sole trader / partnership) or Corporation Tax (if you operate via a company).
• Losses can potentially be offset against other trading profits, in line with general business tax rules.
• CGT rules (and exemptions such as the legal tender CGT exemption) might not be available on those assets held as trading stock.

The line between investing and trading is not always crystal clear. HMRC considers various factors (often referred to informally as the “badges of trade”), such as:

• Frequency and volume of transactions.
• Intent to resell quickly.
• Level of organisation (e.g. advertising, premises, business bank accounts).
• How profits are used and accounted for.

If your bullion activities start to look more like a business than an investment, you should seek professional advice to determine your correct tax position.

5. Inheritance Tax (IHT) and estate planning with bullion

Bullion is a personal asset and forms part of your estate for Inheritance Tax purposes.

5.1 Bullion as part of your estate

On your death:

• The market value of your bullion at the date of death is added to your other assets (property, savings, investments, etc.).
• If the total estate exceeds the IHT nil‑rate band (and any applicable additional allowances), then IHT may be payable by your estate at the prevailing rate on the amount above those thresholds.

Because gold and silver can become quite valuable over time, a significant bullion holding can:

• Push an estate above the IHT threshold, or
• Increase the IHT liability where it is already above the threshold.

This is one reason many clients:

• Store invoices and detailed inventories with their will or estate planning documents.
• Inform their executors or family where the bullion is stored and what it is worth.

5.2 Lifetime gifts of bullion

You can also make lifetime gifts of bullion to family or others. For tax purposes:

• A gift is treated as a disposal at market value for CGT.
• If the bullion is CGT‑exempt (e.g. UK legal tender coins), there is generally no CGT regardless.
• If it is CGT‑liable (e.g. bars, foreign coins), CGT could be triggered if there is a gain.
• For IHT, such a gift is a Potentially Exempt Transfer (PET) if made to an individual.
• If you survive 7 years after making the gift, it can fall outside your estate for IHT.
• If you die within 7 years, some or all of its value may be brought back into the estate calculation, possibly with taper relief after 3 years.

Estate planning with bullion can be sophisticated; professional advice is strongly recommended if you hold substantial value.

6. Bullion held inside tax‑advantaged wrappers (SIPPs, etc.)

Some UK investors consider holding gold within pension schemes such as SIPPs (Self‑Invested Personal Pensions).

6.1 Gold in pensions

Broad outline:

• UK rules allow certain forms of investment‑grade gold to be held within pension schemes, provided specific conditions are met (e.g. allocated, investment‑grade bars from an approved vault, not held personally at home).
• When held inside a compliant pension structure:
• Growth of the asset is generally free from CGT and Income Tax.
• Tax only arises when benefits are taken from the pension (subject to the usual pension rules).

However:

• Not all bullion products qualify.
• Most silver and non‑investment gold products do not qualify for pension inclusion.
• Pension providers and SIPP trustees often have their own restrictions and lists of approved products.

If this is of interest:

• We, as a dealer, can often supply the type of gold bars required for SIPP arrangements.
• You must work through a pension provider that understands and permits such investments.

7. Frequently asked questions (from a UK bullion dealer’s perspective)

7.1 Do I pay tax when I buy gold?

• On most investment‑grade gold bars and coins, no VAT is charged in the UK.
• You do not pay CGT or Income Tax at the point of purchase.
• Later, when you sell, CGT may apply if the gold is not a UK legal tender coin and you make a profit.

7.2 Do I pay tax when I buy silver?

• Yes, silver bullion is usually subject to VAT at the standard rate in the UK.
• VAT is paid upfront as part of your purchase price.
• When you later sell silver, CGT may apply on any gain, just like other investments.

7.3 How do I avoid paying CGT on bullion?

The word “avoid” has to be used carefully – the goal is legitimate tax efficiency, not evasion. Some lawful ways UK investors reduce or eliminate CGT risk include:

1. Choosing CGT‑exempt products, such as:

• UK legal tender Gold Britannias and Sovereigns.
• UK legal tender Silver Britannias (and some other Royal Mint legal tender issues).
• Profits on these holdings are generally exempt from CGT for UK resident individuals.

1. Managing disposal amounts:

• Realising gains gradually over multiple tax years to make use of any available CGT allowance.
• Offsetting gains on bullion against capital losses on other investments (where applicable).

1. Using tax‑advantaged wrappers:

• Where permissible, holding qualifying gold within a SIPP or other approved structure.

You should always check your own circumstances with a tax adviser.

7.4 Do I need to tell HMRC when I buy bullion?

• Simply buying bullion does not automatically trigger a reporting obligation for individuals.
• You should, however, ensure your self‑assessment tax return accurately reflects:
• Any taxable gains on disposals.
• Your overall tax situation.

Dealers may have various reporting obligations for anti‑money‑laundering and other regulatory purposes, but those are separate from your obligation to correctly declare any taxable gains.

7.5 Do I need to show proof of identity when buying bullion?

While not strictly a tax rule, it is related to regulation:

• UK dealers often operate under anti‑money‑laundering (AML) regulations.
• For larger transactions, we may need to verify your identity and address.
• This information is held securely under data protection laws and is not automatically reported to HMRC just because you made a purchase. It is about compliance with AML and related regulations.

8. Practical guidance for UK bullion investors

From the perspective of a UK bullion seller, here are some practical steps you can take to manage your tax exposure sensibly:

8.1 Decide your priorities: VAT, CGT, or liquidity

Different products have different tax characteristics:

• Gold Britannias / Sovereigns:
• No VAT (investment gold).
• CGT‑exempt for UK residents.
• Highly liquid and widely recognised.
• Gold bars:
• No VAT (if investment‑grade).
• CGT‑liable on gains.
• Often lower premiums per gram at higher weights.
• Silver Britannias and other silver coins/bars:
• Subject to VAT in the UK when bought.
• CGT‑liable on gains.
• Attractive to those who value diversification and potential high‑beta to precious metals.

Ask yourself:

• Is my main concern long‑term tax efficiency?
• Am I prioritising lowest premium per gram/ounce?
• Do I care about legal tender and CGT exemption?

We can help you choose products aligned with those priorities.

8.2 Keep immaculate records

To make your life (and your accountant’s life) easier:

• Store all purchase and sale invoices, ideally scanned and backed up.
• Maintain a simple spreadsheet showing:
• Date, product, quantity, purchase price.
• Date, quantity, sale price, buyer or dealer.
• Note which holdings are UK legal tender (CGT‑exempt) and which are not.

If HMRC ever queries your affairs, you will be in a much stronger position if you can provide clear, organised documentation.

8.3 Understand that tax rules can change

Tax laws, allowances and rates are political decisions and can change over time. For example:

• The CGT allowance has been reduced significantly in recent years.
• Future Governments could potentially alter the rules around:
• The VAT status of investment gold.
• The CGT treatment of legal tender coins.
• Pension rules on holding physical gold.

We, as a dealer, monitor these developments, but we cannot predict future policy. It is sensible to review your strategy periodically with a professional adviser.

8.4 Take professional advice for larger portfolios

If your bullion holdings are:

• Worth a significant amount, or
• Form a core part of your retirement or estate planning,

you should seek advice from a UK tax adviser or financial planner familiar with:

• Precious metals,
• CGT,
• IHT,
• Pensions and investments.

As a dealer, we can explain the tax characteristics of specific products (e.g. which coins are CGT‑exempt), but we cannot provide detailed personal tax planning.

9. Summary: key tax rules for UK gold and silver bullion

To bring everything together:

• VAT
• Most investment‑grade gold bars and qualifying gold coins are exempt from UK VAT.
• Silver bullion (bars and coins) and non‑investment gold are usually subject to VAT at the standard rate when purchased in the UK.
• Exports to overseas customers may be zero‑rated for UK VAT, but local import taxes can apply.
• Capital Gains Tax (CGT)
• Profits on bullion disposals can be subject to CGT for UK residents.
• UK legal tender coins (e.g. Gold & Silver Britannias, Sovereigns) are CGT‑exempt, a major advantage for many investors.
• Foreign coins, bars and rounds are CGT‑liable when sold at a gain, subject to annual allowances and rates.
• Income Tax vs CGT
• Most buyers are private investors, whose bullion gains fall under CGT (or exemption for UK legal tender coins).
• If you are effectively running a trading business in bullion, profits can fall under Income Tax/Corporation Tax rules instead.
• Inheritance Tax (IHT)
• Bullion forms part of your estate and may contribute to IHT liabilities.
• Lifetime gifts of bullion can have both CGT and IHT implications.
• Pensions & wrappers
• Certain forms of investment‑grade gold may be held in pension schemes (e.g. SIPPs) under strict conditions, benefiting from tax‑advantaged growth.
• Silver and most non‑investment gold typically do not qualify.
• Good practice
• Choose products (e.g. UK legal tender coins) with tax advantages aligned to your goals.
• Maintain excellent records of all transactions.
• Be aware that tax rules evolve; review your strategy over time and seek professional advice for sizable holdings.