Over-the-Counter Cash Deal

The over-the-counter cash deal refers to the anonymous purchase or sale of precious metals (gold, silver, platinum, palladium) for cash, without the dealer recording the customer's identity. The term derives from the fact that the transaction is literally settled "across the counter" — at the shop desk. For many investors the over-the-counter cash deal was for decades the preferred way to acquire physical precious metal discreetly. Since the tightening of the UK's anti-money-laundering framework, however, the scope for complete anonymity has been considerably restricted.

Legal basis: cash limits and identification duties

The UK Money Laundering Regulations require certain dealers to establish the identity of their customers (identity verification) once particular transaction thresholds are reached. Under the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017, a high value dealer is any business that accepts (or makes) cash payments of €10,000 or more (in sterling equivalent) for goods, whether in a single transaction or in several linked instalments.

Important: A business that accepts large cash payments for precious metals must register with HMRC as a high value dealer and carry out customer due diligence — verifying and recording the customer's identity. A genuinely anonymous over-the-counter cash deal is therefore no longer possible for larger amounts.

For identification, the following details are typically recorded:

1. Full name
2. Date of birth and place of birth
3. Residential address
4. Type and number of the identity document (passport or driving licence)

The tax dimension

The over-the-counter cash deal has a second, tax-related side. Gains from selling physical precious metal may be liable to Capital Gains Tax (CGT) in the United Kingdom. There is no German-style one-year speculation period: the decisive question is the type of item and the size of the gain.

• UK legal-tender coins from The Royal Mint (Sovereign, Britannia, Lunar, Queen's Beasts) are exempt from CGT — gains are tax-free without limit.
• Non-legal-tender coins and gold bars are subject to CGT on gains above the annual exempt amount.

Gain = disposal proceeds − acquisition cost

The anonymity of the original purchase may make it harder to prove the acquisition date and price — but it does not remove the obligation to report a taxable gain. Where documentation is missing, HMRC may make estimates during an enquiry. Anyone wishing to use the current gold price as a purchase basis should therefore always keep purchase receipts.

Note: This article does not constitute tax or legal advice. For tax questions on precious-metal purchases, please consult a qualified accountant or tax adviser.

Practical handling today

In practice, a precious-metal purchase from a reputable dealer works as follows today:

• Below the high-value cash threshold: cash payment without proof of identity is possible (over-the-counter deal in the classic sense).
• At the high-value threshold: identity document required, documentation by the dealer (Money Laundering Regulations 2017).
• On suspicion of money laundering: duty to submit a Suspicious Activity Report (SAR) to the National Crime Agency — regardless of the amount (Proceeds of Crime Act 2002).

Dealers who breach anti-money-laundering duties risk substantial penalties and loss of registration. Buyers who deliberately split transactions to stay below the identification threshold ("smurfing" / structuring) circumvent the dealer's due-diligence obligations and may commit an offence under the Proceeds of Crime Act 2002 where the funds derive from criminal conduct.

Over-the-counter deal vs. online purchase

You can work out the currently achievable buying price in advance with our calculator — so you go into every sale well prepared.

In brief

In the United Kingdom, the over-the-counter cash deal allows anonymous cash payments for precious-metal purchases only below the high-value cash threshold; above it, customer due diligence is legally required. Anyone buying or selling physical investment gold or silver should always keep receipts, so that the purchase and sale dates can be evidenced for tax purposes.