Cash Limit on Gold Purchases
Also: identification requirement, AML threshold, cash-deal limit, precious metal cash limit
The cash limit on gold purchases determines the amount above which dealers must verify and document the identity of the buyer under the UK Money Laundering Regulations.
Anyone buying gold with cash runs into a legal obligation above a certain amount that surprises many buyers: the dealer is required to verify and document the customer's identity. This so-called cash limit is not a purchase limit but a due-diligence duty under the UK Money Laundering Regulations. Dealers who accept large cash payments must register as high value dealers with HMRC.
Legal basis: the Money Laundering Regulations
The Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 implement international anti-money-laundering standards into UK law. Precious metal dealers – that is, commercial buyers and sellers of gold, silver, platinum and palladium – count among the "relevant persons" where they accept high-value cash. They must carry out customer due diligence for cash transactions above the applicable thresholds.
A high value dealer under UK law is a business that accepts cash payments of €10,000 or more (or the sterling equivalent) for goods, whether in a single transaction or in several linked instalments. Such dealers must register with HMRC, appoint a nominated officer and carry out customer due diligence. For occasional transactions, customer due diligence is generally required at or above the €15,000 threshold, but high value dealers must identify customers as soon as the €10,000 cash threshold is met.
What exactly happens at the threshold?
Above the threshold the dealer is required to establish the identity of the buyer. In practice this means:
- Present photo ID: passport, national identity card or UK driving licence.
- Record data: name, date of birth, address, type and number of the document.
- Retain documents: the dealer must keep the records for at least five years.
- Suspicious activity report: on indications of money laundering the dealer must submit a report to the National Crime Agency (NCA).
| Cash purchase amount | Dealer's obligation |
|---|---|
| Below the cash threshold | Generally no identification requirement |
| At or above €10,000 in cash | Registration as high value dealer + identification mandatory |
| Split but recognisably linked | Identification still due (no smurfing) |
| Any amount on suspicion | Suspicious activity report to the NCA regardless of amount |
Note: The cash threshold applies to cash payment. For bank transfer or debit/credit card different due-diligence levels apply; identity there is typically already evidenced by the payment route.
Over-the-counter cash deal below the threshold
An over-the-counter cash deal refers to an anonymous cash transaction settled over the counter without a bank account. Below the threshold such a deal is in theory possible anonymously at a reputable dealer – the dealer is not required to record the identity.
In practice many large precious metal dealers and banks have lowered the anonymity threshold internally further or require identification from the first pound in order to minimise compliance risks. Buyers should therefore inform themselves with the respective dealer in advance.
What does "structuring" mean and why is it prohibited?
Anyone who splits a purchase of, say, £4,000 into two tranches to stay below the threshold commits an act of evasion (structuring / smurfing). The Money Laundering Regulations prohibit this explicitly: recognisably linked partial purchases are added together. Dealers who notice such patterns and nevertheless carry out no identification risk unlimited fines and criminal liability.
Formula: threshold check
Total amount of the transaction(s) in cash ≥ €10,000
→ identification requirement applies (high value dealer)
Single purchase A (£1,500) + single purchase B (£700) = £2,200
→ if recognisably linked and above the threshold: duty applies
Tax aspects: no link to the holding period
The cash limit is an anti-money-laundering rule and has no direct influence on the tax treatment of a gold purchase. In the United Kingdom there is no German-style one-year speculation period. Instead, gains on precious metals may be subject to Capital Gains Tax (CGT): UK legal-tender coins from The Royal Mint (Sovereign, Britannia, Lunar, Queen's Beasts) are CGT-exempt with unlimited gains, whereas non-legal-tender coins and gold bars are subject to CGT above the annual exempt amount.
For a tax assessment of your individual gain the tax estimator is helpful, as is advice from an accountant. This glossary entry does not constitute tax or legal advice.
Duties for buyers: what do private individuals need to know?
Buyers have no AML duty of their own, but must present ID on a legitimate request from the dealer. If they refuse identification, the dealer may decline the transaction. The stored data are subject to data protection (UK GDPR); the dealer may not use them for other purposes.
For the purchase of physical investment gold – that is, VAT-exempt gold bars and certain coins – identification changes nothing legally about the purchase price. With the purchase price calculator you can determine in advance what amount a dealer pays for scrap gold.
In brief
Above a cash amount of €10,000 (or the sterling equivalent) precious metal dealers in the United Kingdom are legally required to register as high value dealers and to verify and document the buyer's identity, retained for five years – anyone who knows this as a buyer is not surprised at the next gold purchase. The limit is not a tax rule but serves money laundering prevention.