Holding Period

The holding period is the length of time an asset is owned – from acquisition to disposal. Unlike in some other countries, the United Kingdom does not apply a one-year speculation period after which private gains become tax-free. Instead, gains on the disposal of physical gold, silver, platinum or palladium may be subject to Capital Gains Tax (CGT) regardless of how long the metal has been held. The legal basis is the Taxation of Chargeable Gains Act 1992, administered by HMRC.

No Tax-Free Period for Precious Metals in the UK

For physical precious metals – bars, coins, granules – there is no holding period after which a gain automatically becomes tax-free. Whether tax is due depends primarily on the type of coin and on the annual exempt amount:

Note: this page provides general information and does not constitute tax or investment advice. For binding rulings please consult a qualified adviser.

Calculating the Gain

The chargeable gain is calculated as the disposal proceeds minus the acquisition cost (plus allowable costs such as certain fees):

Gain = disposal proceeds − acquisition cost

Example: a gold bar bought for £1,000 and sold for £1,600 produces a chargeable gain of £600. Whether CGT is actually due depends on whether this gain, together with other chargeable gains in the tax year, exceeds the annual exempt amount.

Where several purchases of the same asset are made, HMRC uses share pooling / identification rules rather than a simple first-in-first-out approach for most assets, so partial disposals must be carefully documented. (For general orientation only – the treatment of the FIFO principle differs between jurisdictions.)

Annual Exempt Amount

Even where a gain is in principle chargeable, no CGT is due if the total of all chargeable gains in the tax year stays within the annual exempt amount. This is a genuine allowance: only the gain above the exempt amount is taxed, not the whole amount.

Losses from chargeable disposals can generally be set against gains of the same tax year, and unused losses may be carried forward, subject to HMRC rules.

Particularities for Different Precious Metal Forms

• Physical bars and bullion coins: subject to CGT unless they are UK legal-tender Royal Mint coins.
• Investment gold: VAT-exempt on purchase (HMRC), but a chargeable gain on disposal may still be subject to CGT for bars and non-legal-tender coins.
• Silver, platinum, palladium (physical): 20% VAT applies on purchase, increasing the effective acquisition cost; gains may be subject to CGT.
• Legal-tender Royal Mint coins: CGT-exempt with unlimited gains – a decisive advantage.
• Collector coins (numismatics): treated as chargeable assets; CGT may apply.

You can follow the current gold price and the historical price trends on this site at any time to assess the optimal moment to sell.

Record-Keeping Obligations

Investors are well advised to keep purchase receipts, invoices and bank statements. HMRC may require proof of the acquisition cost when assessing a gain. For over-the-counter cash deals it is advisable to keep voluntary personal records with date, weight and purchase price.

In Brief

The UK has no one-year speculation period: gains on physical precious metals are, in principle, within the scope of Capital Gains Tax. The key levers are whether the coin is a UK legal-tender Royal Mint coin (CGT-exempt) and whether total gains stay within the annual exempt amount. Anyone who keeps careful records of purchases and sales can plan disposals to make the best use of the allowance.