UK Tax on Gold and Silver: CGT, VAT and What Investors Need to Know

Tax treatment is one of the biggest differences between precious metal products in the UK, and getting it wrong can cost you a fifth of your investment before you start. The two taxes that matter are VAT on purchase and Capital Gains Tax (CGT) on disposal. Understanding which products attract which tax is essential before you buy — not after you sell.

Investment gold — coins and bars of at least 995 fineness meeting HMRC’s definition — is exempt from VAT. This covers gold Britannias, Sovereigns (despite being 22ct, they qualify as investment gold), and most one-ounce bullion bars. Silver, platinum and palladium are not VAT-exempt, which is why physical silver carries a 20% VAT charge in the UK. That VAT is a real, unrecoverable cost that you must overcome before you are in profit.

On the gains side, gold and silver coins that are UK legal tender, such as Sovereigns and Britannias, are exempt from CGT entirely, regardless of how much profit you make. This is a significant advantage: a UK resident could make a six-figure gain on Britannias and owe nothing to HMRC. Non-legal-tender bullion — bars and foreign coins like Krugerrands, Maple Leafs or Eagles — does not enjoy this exemption.

Gains on non-legal-tender bullion count towards your annual CGT allowance. Any gain above the allowance is taxed at your applicable CGT rate. Keep purchase receipts, note dates and values, and consider spreading disposals across tax years to use multiple allowances. Holding bullion within an ISA or SIPP (via an ETC) shelters gains from CGT altogether, which can be attractive for larger positions in non-legal-tender metal.

A practical point: if you anticipate large gains, favour UK legal-tender coins (Britannias and Sovereigns) for the CGT exemption, even if the premium is slightly higher. For smaller positions or where you want the lowest premium per ounce, bars inside a tax wrapper can make sense. This guide is general information, not tax advice; tax rules change and individual circumstances vary, so speak to an accountant before making significant decisions.