You might see the term CGT and Capital Gains Tax when it comes to investments, bullion and coins. What does this mean, and what does this mean to you when you buy gold.from Hatton Garden Metals.
What is Capital Gains Tax?
Put simply Capital Gains Tax is the profit when you sell (or ‘dispose of’) something (an asset) that has increased in value.
The tax is applied to the gain you make, not the amount you receive. Disposing of an asset covers: Selling the item/s, giving it away as a gift, transferring it to someone else, swapping it for something else, getting compensation for it (if it’s been lost or destroyed). In the world of Bullion this means this relates to the profit you make by selling gold coins and bars that are not CGT Free.
What qualifies for Capital Gains Tax?
You need to pay capital gains tax on most personal possessions worth £6000 or more, and shares that are not in an ISA or PEP and any business assets, these are known as chargeable assets.
Capital Gains Tax allowances
You need to pay Capital Gains Tax on your overall gains above your tax-free allowance. The Capital Gains tax-free allowance is £6000 (2023/2024. This allowance is being reduced for financial year 2024-2025 to only £3000. HMRC displays any changes to the Capital Gains Tax allowance
What is CGT Free?
Any profit that you make on your gold investment that is under £6000 (2023-2024) will be Tax free, however this rate is applied across all transactions within that financial year, so if you have disposed of other assets then the total gains across all transactions applies to CGT. There are however several ways of avoiding Capital Gains Tax. Hatton Garden Metals offers a range of CGT exempt coins. Coins which are classed as UK legal tender are exempt from Capital Gains Tax.
Which coins are CGT exempt?
Some of the most well-known coins that are Capital Gain Tax Free include:
Gold Britannias .
Gold Sovereigns.
Queen’s Beasts.
Tudor Beasts.
Half and Quarter Britannias.
Half and Quarter Sovereigns.
These coins are classed as UK legal tender and you will avoid paying the Capital Gains Tax on any profit you make by selling these specific coins. These coins are some of the most popular investments we see.
Capital Gains Tax on Gold Bars?
Hatton Garden Metals provide a full range of Gold bullion bars from LBMA mints and in a variety of sizes. Gold bars are an excellent and attractive investment due to low premiums and a variety of size and weight options. You could be liable for CGT upon the sale of your bullion bars should the profit exceed the CGT allowance, as gold Bullion bars are not classed as UK legal currency
Capital Gains Tax on Silver Bullion
Certain Silver bullion coins benefit for being CGT exempt. These are coins that are considered as UK legal tender. Gold bullion bars The silver Britannia is considered UK legal tender and is exempt for CGT.
Silver bullion bars are not exempt from CGT as they do not fall under the exemption categories. All silver investment coins and Bars that are sold for physical possession in the United Kingdom are subject to VAT at the standard rate (2023 -20%)
Capital Gains Tax on Platinum Bullion
Certain Platinum coins also benefit from being CGT exempt. Coins such as the Platinum Britannia are classed as UK legal tender and therefore are capital gains tax exempt. Platinum Bullion Bars are not CGT exempt but often are sold at a lower premium. Platinum bullion bars and coins that are sold for physical possession in the United Kingdom are subject to VAT at the standard rate (2023 – 20%).
Capital Gains Tax on Palladium Bullion
Palladium bullion and coins are not exempt from CGT. The Royal Mint do not currently produce a UK legal tender palladium coin, so all palladium bullion and coin would be subject to capital gains tax.
Investing in Non-CGT Free Gold
Investing in gold is one of the most popular investments. Hatton Garden Metals offers a huge range of gold coins bullion such as the buy gold options on the Hatton Garden Metals website,