A Guide To VAT, Capital Gains Tax and Gold For the UK Investor
VAT AND GOLD
The Good News is that there is no VAT (Value added Tax) payable on investment Gold. So the next obvious question is ‘What is investment gold?’
Investment gold is classified by HMRC as:
1. Gold bullion which
(a) Has a purity of no less than 995 thousandths
(b) Is in the form of a bar or wafer
(c) Is of a weight accepted by the bullion markets
2. Gold coins minted after 1800 that:
(a) Have a purity of not less than 900 thousandths
(b) Are or used to be legal tender in their country of origin
(c) Is of a description of coin that is normally sold at a price that does not exceed 180% of the open market value of the gold contained in the coin
3. An investment gold coin as specified by HMRC (Notice 701/21A Investment gold coins). HM Revenue and Customs has produced a comprehensive list of all the coins which they consider to be investment gold coins and are therefore exempt from VAT. Click here for the complete list.
The information above might sound a little complicated but what is basically means is that any gold bullion or gold coins you buy in the UK or EU for investment purposes is completely VAT free.
CAPITAL GAINS TAX AND GOLD
Capital Gains Tax (CGT) is usually paid on the profit of something that you sell. Most assets are liable to CGT when you sell them and gold is no different. The only exception as far as we can tell is that capital gains tax is not liable on British legal currency. This means that there is no CGT payable on Gold Britannia coins, British Gold Sovereigns or Gold one, two or five pound coins.