Precious metals and UK tax

There is no holding period

Begin by unlearning the rule that dominates the subject almost everywhere else. British tax law contains no holding period for physical gold, silver, platinum or palladium. There is no anniversary after which a profit quietly stops being taxable and no advantage whatsoever in delaying a sale for tax reasons alone. A gain realised a fortnight after purchase and the identical gain realised twenty years later are charged in exactly the same way.

This needs stating bluntly, because much of the material circulating in English is written for other systems. Germany exempts a private gain once more than a year has passed, and several European states run variations on the same idea; the holding period entry describes that pattern. Britain has no counterpart, and a plan built on holding a bar for a set number of years is a plan built on foreign law.

What Britain provides instead is something no continental system has: whole classes of coin permanently outside the charge, not because of how long they were owned but because of what they legally are. That trade-off runs through everything below. The tax calculator applies the British rule set to a specific purchase and sale, and the purchase price calculator estimates what a disposal is likely to realise.

Capital gains tax: two rates and one allowance

Gains on chargeable assets are taxed under the Taxation of Chargeable Gains Act 1992. Since 30 October 2024 the rates for disposals of this kind have been 18 per cent and 24 per cent, unchanged for 2026/27. Which applies is a matter of the taxpayer rather than the asset: the gain is stacked on top of taxable income, and the part falling within the basic rate band of £37,700 is charged at 18 per cent while everything above it is charged at 24 per cent. A single disposal can straddle both rates.

Before any rate is applied, the annual exempt amount of £3,000 is deducted. It sits in TCGA 1992 s.1K, and it is a genuine allowance rather than a threshold: exceeding it makes only the excess taxable, not the whole gain. Anyone arriving from a system built on exemption thresholds should read the tax-free allowance entry, because the two mechanisms behave very differently at the margin.

The tax year matters here: the allowance is annual, so completing a disposal on 4 April rather than 7 April moves it into a different year with a fresh £3,000.

Sterling is not a chargeable asset

The British exemption works through a provision that never mentions gold. Under TCGA 1992 s.21(1)(b), sterling is not a chargeable asset; coins issued by the Royal Mint under proclamation are legal tender by virtue of Coinage Act 1971 s.2(1), and legal tender here is sterling. Disposing of such a coin is therefore not the disposal of a chargeable asset, and the gain never enters the computation.

The consequences run wider than a simple exemption. A gain that is not chargeable consumes no part of the annual exempt amount, is not added to other gains and is not reported as a chargeable disposal, and there is no ceiling on it. Someone selling a large holding of Sovereigns at a substantial profit has, for capital gains purposes, done nothing at all.

One boundary is easy to miss. Sovereigns struck before 1837 are no longer legal tender, so they fall outside s.21(1)(b) and are treated as ordinary tangible property. Age makes them more interesting to collectors and less useful for tax, the reverse of what most buyers assume; pieces bought for their numismatic interest generally belong in the chargeable category.

What HMRC has named, and what the mint claims

Precision is necessary here, because the claim is repeated far more loosely than the guidance supports. HMRC's Capital Gains Manual at CG78305 names the exempt coins, and the list is short: the Sovereign minted from 1837 onwards and the gold Britannia. The same page expressly treats the Krugerrand as a chargeable asset.

The Royal Mint states more broadly that its bullion coins are free of capital gains tax, applying the legal-tender reasoning to its whole modern range. The reasoning is coherent — but it is the mint's own position rather than an assurance from HMRC, and no coin-by-coin confirmation has been published. Where the exemption is the reason a coin was bought, the two named coins are the only ones on ground that cannot be argued about.

Every foreign coin is chargeable, whatever its status at home. A Maple Leaf, a Vienna Philharmonic and a Krugerrand are metal rather than sterling as far as British law is concerned. That is no argument against owning them, as the gold buying guide sets out; it means the after-tax comparison has to be made before the purchase rather than after the sale.

Bars are chattels, and chattels have a cushion

A gold bar is tangible movable property, which in tax language is a chattel, and chattels have their own regime in TCGA 1992 s.262. Two reliefs sit inside it: where the disposal proceeds are £6,000 or less, no chargeable gain arises at all, and where they exceed that figure, the amount brought into charge is limited to five thirds of the excess over £6,000. The cliff edge becomes a slope.

The relief is generous at the bottom of the range and fades fast. On proceeds a little above £6,000 the five-thirds limit is usually the lower figure and therefore bites; further up, the actual gain is smaller and the limit is irrelevant. The rules protect modest disposals of silver bars and small gold bars, and do very little for a large one.

An anti-fragmentation rule sits alongside them: items forming a set and disposed of to the same person, or to connected persons, count as one disposal, so a matched series cannot be sold in pieces to keep each transaction under £6,000. The melt value calculator helps establish where a holding sits against the threshold.

The currency exclusion that takes the cushion away

Now the provision that reverses the intuition of almost every holder. Section 262(6) disapplies the chattels rules for currency of any description. A foreign bullion coin is currency in its country of origin, so the £6,000 shelter and the five-thirds limit are simply not available for it: the gain is chargeable from the first pound, with nothing in front of it but the annual exempt amount.

The result is a three-way split worth committing to memory, because it is where most of the money is won or lost.

Read down that table and the ranking is upside down relative to the price list. A bullion coin from overseas is often the cheapest way to buy an ounce and the worst treated of the chargeable categories. A bar carries a lower premium than a coin and keeps the chattels cushion. A British coin costs the most per ounce and is not taxed at all. None of that makes one choice correct; it makes the tax position part of the arithmetic rather than an afterthought.

A worked example across the three categories

Suppose a holder makes two disposals in the tax year to 5 April 2027, and pays basic rate tax on their income throughout.

The first is a gold bar bought for £4,500 and sold for £7,200. The gain is £2,700. Because the proceeds exceed £6,000, the chattels relief is tested: five thirds of the £1,200 excess is £2,000, which is less than the actual gain, so £2,000 is the amount brought into charge.

The second is a parcel of Krugerrands, also bought for £4,500 and also sold for £7,200. The arithmetic is identical and the outcome is not. Section 262(6) excludes currency from the chattels rules, so the whole £2,700 is chargeable.

Total chargeable gains are therefore £4,700. Deducting the annual exempt amount of £3,000 leaves £1,700, charged at 18 per cent because the gain sits within the basic rate band, giving tax of £306. Had the same holder instead sold gold Britannias for the same profit, the disposal would not have entered the computation at all and the bill would have been nil.

Two observations follow from the same figures. Sold on its own, the bar would have produced a chargeable amount of £2,000, inside the allowance, so no tax and no report. And total proceeds here were £14,400, well under the reporting trigger discussed below.

Working out the gain, and the costs that reduce it

The gain is the disposal proceeds less the acquisition cost, less the incidental costs of acquiring and disposing of the asset. Valuation and assay fees, insured carriage and sale commission belong in that computation, and each needs an invoice behind it.

Where an item is given away rather than sold, the disposal still takes place at open market value, so the absence of cash does not remove the charge. The spot price that day, read against the dealer's buying price, is the usual starting point, and the gold price and silver price pages carry the series needed to support a figure for a past date.

Identical items bought at different times need particular care. If ten one-ounce bars were acquired across five years and three are sold, the cost attributed to those three has to come from the records — and there is nothing to work from unless each acquisition was documented separately at the time.

VAT: investment gold is exempt, the white metals are not

Value added tax is charged at the point of purchase and is a separate question from any later gain. Investment gold is exempt under VATA 1994 Schedule 9 Group 15, which is why a British buyer pays close to the metal value rather than a fifth above it. The exemption is defined rather than general, and the definition is worth knowing precisely:

• Bars and wafers qualify at a fineness of 995 or better.
• Coins qualify where they were minted after 1800, have a fineness of at least 900, are or have been legal tender in their country of origin, and are sold at a price not exceeding 180 per cent of the open market value of the gold contained in the coin.

That last criterion quietly removes heavily marked-up commemoratives from the exemption: once the collector element in the price is large enough, the item is no longer investment gold for VAT purposes and the standard rate applies to the whole of it. Note too that the test is about gold. Silver, platinum and palladium have no equivalent relief anywhere in the legislation and are standard-rated at 20 per cent — the surcharge that makes the white metals so much more expensive to enter. The silver calculator shows the effect per gram, and the guide to buying silver works through the break-even point.

Import VAT on silver, and the scheme that does not apply

Since the United Kingdom left the single market, silver arriving from the European Union is an import like any other and import VAT of 20 per cent falls due on it. The customs and import entry sets out the mechanics; the practical effect is that a silver position has to appreciate by roughly a fifth before the holder is back to the metal value paid for it.

One point has to be stated plainly, because it is frequently asserted otherwise. There is no margin scheme for precious metals in the United Kingdom. HMRC's guidance at VATMARG02100 puts investment gold and precious metals outside the second-hand margin schemes altogether, so the arrangement familiar to buyers in parts of continental Europe, under which tax is charged only on a dealer's mark-up, has no British counterpart. The public notice once cited for gold was withdrawn in December 2021 and should not be relied on either.

Platinum and palladium follow silver rather than gold throughout: 20 per cent on purchase, no exemption, and no British legal-tender bullion coin named in CG78305 that would take a gain outside the charge. The platinum and palladium guide deals with the consequences.

When a disposal has to be reported

Two separate triggers require a Self Assessment return, and the second catches people out.

• The total chargeable gains for the tax year exceed the annual exempt amount of £3,000. This is the obvious case, and tax will normally be payable.
• The total proceeds of chargeable disposals exceed £50,000, even where the gain is small or nil and no tax is due at all. Selling a long-held position at a modest profit can breach this without producing anything to pay.

The word chargeable is doing real work in both. Disposals of Sovereigns minted from 1837 and of gold Britannias are outside the charge, so they add neither to the gains figure nor to the proceeds figure. A holder whose sales that year were entirely of those coins has nothing to report, however large the sums.

Where a report is needed, gains can also be declared through HMRC's real-time capital gains tax service instead of waiting for a return. Either route requires the same underlying figures: dates, costs, proceeds and the evidence for each.

Deadlines and the real-time service

For a tax year ending on 5 April, a paper Self Assessment return is due by 31 October and an online return by 31 January following the end of that year. Missing the paper deadline does not close the online route, but the January date is hard and the penalties for passing it are automatic.

The real-time service is worth considering where a single disposal is the only reason a return would be filed at all; it changes the mechanics and the timing, not the amount due. Either way the arithmetic has to be assembled first, and the tax estimator produces an indicative figure from purchase and sale details before the forms come out.

Losses, and why they still have to be claimed

A loss on a chargeable asset reduces chargeable gains. Losses of the same tax year are set against gains of that year, and anything left over is carried forward against gains of later years. For most holders of metal the carry-forward is the relevant part, because losses and gains rarely arrive in the same year.

The trap is that a carried-forward loss is not preserved simply by having happened. It has to be notified to HMRC, within four years of the end of the tax year in which it arose. A loss that is never reported because there was no gain to set it against, and therefore no return to file, can be lost permanently through nothing worse than inaction.

A symmetry follows from the sterling exemption, too. If a gain on a Sovereign or a Britannia is not a chargeable gain, a loss on one is not an allowable loss. Bars and foreign coins, being chargeable, do produce allowable losses; exempt coins produce nothing in either direction.

What an ISA cannot hold, and what a pension can

Two British wrappers come up constantly, and the answers differ.

An ISA cannot hold physical metal. The list of qualifying investments is exhaustive, bullion does not appear on it, and no amount of structuring changes that.

A self-invested personal pension can hold gold bars. Gold bullion of a fineness of at least 995, in bar or wafer form, is a permitted investment under SI 2006/1959 Article 2, and HMRC confirms the position in its Pensions Tax Manual at PTM125100. Three limits matter: coins do not qualify, however British and however pure; silver, platinum and palladium do not qualify at all; and the metal must be acquired and held by the scheme administrator rather than delivered to the member, which brings custody and administration charges with it.

The logic is narrower than it looks. Gains inside a pension are outside capital gains tax anyway, and a Sovereign is already outside it in a drawer at home, so the wrapper adds nothing for coin holders. It is bar holdings funded with pension money where the SIPP route makes sense — a conversation for a pensions adviser. Storage outside a pension is covered in the guide to storing and insuring.

Inheritance tax: two frozen bands

Capital gains tax stops at death. Inheritance tax does not, and the exemption that mattered so much during life falls away entirely.

The nil-rate band is £325,000 and the residence nil-rate band, available where a home passes to direct descendants, is a further £175,000. Both are frozen until 2030/31, so in real terms they shrink every year while metal prices do not. Above the available bands the rate is 40 per cent.

Then the point that has to be spelled out: the capital gains exemption for Sovereigns and Britannias has no effect on inheritance tax whatsoever. A collection of legal-tender coins that could have been sold in the owner's lifetime without a penny of capital gains tax is, on death, simply property in the estate. An estate plan built on the assumption that the advantage survives its owner will fail at the only moment it is tested.

Valuing metal for probate

Precious metal is valued at its open market value on the date of death — for a bar, essentially the metal value at the spot price that day, and for a collectable piece possibly more. The historical prices page provides the series needed for a date already past, and the gold calculator converts weight and fineness into a value at a given price.

Metal belongs on form IHT400 together with schedule IHT407, which covers household and personal goods. Items are listed individually from £1,500 upwards; below that they can be grouped. An executor faced with an undocumented collection has to identify, weigh, assess and value every piece, accurately enough to sign a declaration about it — which is where the record-keeping described below stops being tidiness and becomes a service to whoever handles the estate.

Gifts, the seven-year rule and the uplift on death

A lifetime gift of metal to another individual is normally a potentially exempt transfer. Survive seven years from the date of the gift and it drops out of the estate completely; die within that period and its value is brought back in, with taper relief reducing the tax where the gift was made more than three years before death. There is also an annual exemption of £3,000 for gifts.

Two capital gains points sit alongside this and are frequently missed. First, giving away a chargeable asset is itself a disposal at market value, so handing a bar or a parcel of foreign coins to an adult child can create a liability for the giver with no sale proceeds to fund it. Gifts of Sovereigns and Britannias raise no such issue, there being no chargeable disposal to begin with.

Second, assets passing on death receive an uplift: the beneficiary is treated as acquiring them at their date-of-death value, so the gain accrued during the deceased's lifetime is never charged to capital gains tax, and inheriting and selling immediately produces little or no chargeable gain. That interaction — inheritance tax on the whole value, but a clean capital gains base for the heir — is the pivot on which most decisions about passing metal down actually turn, and it deserves advice rather than a rule of thumb.

The paperwork that decides the tax

Nothing above can be relied on without documents. The burden of establishing a cost, a date or a valuation falls on the taxpayer, and HMRC is under no obligation to reconstruct a history nobody wrote down.

• A dated purchase invoice for every acquisition. It fixes the cost, and where the same bullion coin or bar type was bought repeatedly it is the only way to attribute cost correctly on a partial sale.
• Evidence of what the item is. Weight, fineness and, for coins, the year of minting. The exemption for a Sovereign depends on it being of 1837 or later; the chattels question depends on whether the piece is currency.
• Incidental costs. Assay fees, insured carriage and sale commission reduce a gain only if there is an invoice for them.
• A running schedule. One table per tax year with date, item, weight, cost and proceeds supports a return, supports a loss claim, and is exactly what an executor will need.

Keep the documents somewhere other than with the metal, for the same reason a spare key does not live in the lock. Definitions of the terms used throughout are collected in the glossary.

Investing, trading and where advice is needed

Almost everyone buying physical metal is investing, and gains fall under the capital gains rules described above. The position changes if the activity amounts to a trade — buying for resale, with the organisation and frequency of a business rather than the management of a personal holding. Trading profits are charged as income rather than as capital gains, and the sterling exemption gives no protection, because trading stock is not held as an investment. No fixed number of transactions draws the line; HMRC looks at the activity as a whole, which is why anyone operating at scale should take advice first.

Residence and domicile decide whether British rules apply to a given person at all, and where they meet another country's system the answer can be genuinely complicated. Nothing on this page addresses that.

Finally, the honest limits. This is general information about the law of the United Kingdom for 2026/27, written to show how the pieces fit together: no holding period, the sterling exemption, the chattels rules and the currency exception inside them, VAT, and the inheritance tax overlay. It is not advice about anyone's circumstances, it names no dealer and it forecasts no price. For a specific disposal a chartered tax adviser or HMRC itself is the right place to go; the tax calculator gives the shape of the answer before you get there.