Tax-Free Gold in the UK: How to Legally Pay Zero CGT on Gold Profits
With gold at £116.78 per gram, many UK investors are sitting on large unrealised gains. Gold Sovereigns and Britannias are completely exempt from Capital Gains Tax as UK legal tender — a fact most people do not know. Here is the complete guide to gold taxation in the UK for 2026.
Quick Answer
Gold Britannias and Gold Sovereigns are completely free from Capital Gains Tax because they are classified as UK legal tender. You can make unlimited profits and owe zero CGT. All investment gold is also VAT-free in the UK. However, gold of any type is subject to Inheritance Tax. The tax year ends 5 April 2026 — relevant if you are planning disposals.
Gold Tax Rules at a Glance
Not all gold is taxed equally in the UK. The type of gold you buy determines your tax liability when you sell:
| Gold Type | VAT | Capital Gains Tax | Inheritance Tax |
|---|---|---|---|
| Gold SovereignTax-Free | VAT-Free | CGT-Free (legal tender) | Subject to IHT |
| Gold BritanniaTax-Free | VAT-Free | CGT-Free (legal tender) | Subject to IHT |
| Gold Bars (995+) | VAT-Free | CGT liable (above £3k) | Subject to IHT |
| Krugerrand | VAT-Free | CGT liable (above £3k) | Subject to IHT |
| Canadian Maple Leaf | VAT-Free | CGT liable (above £3k) | Subject to IHT |
| American Eagle | VAT-Free | CGT liable (above £3k) | Subject to IHT |
| Gold ETF (e.g. iShares) | VAT-Free | CGT liable (above £3k) | Subject to IHT |
| Gold Jewellery | 20% VAT on purchase | CGT liable (above £3k) | Subject to IHT |
Why Are Sovereigns and Britannias CGT-Free?
Under the Capital Gains Tax Act 1992, Section 21(1)(b), currency that is legal tender in the United Kingdom is exempt from Capital Gains Tax. HMRC confirms this in their Capital Gains Manual CG12600.
Gold Sovereigns (face value £1) and Gold Britannias (face value £100) are both legal tender coins issued by The Royal Mint. Their face values are symbolic — the actual gold content is worth far more — but the legal tender status is what triggers the CGT exemption.
Unlike the annual CGT allowance (£3,000 for 2025/26), the legal tender exemption has no upper limit. Whether your profit is £1,000 or £1,000,000, no Capital Gains Tax is due on Sovereigns or Britannias.
This makes them particularly attractive for larger holdings where CGT on bars or foreign coins could run into thousands of pounds.
Important Distinction
Only coins that are (or were) UK legal tender qualify. This means Gold Sovereigns (all dates from 1817 onwards) and Gold Britannias (from 1987 onwards). Other popular coins — Krugerrands, Canadian Maples, American Eagles, Chinese Pandas — are VAT-free as investment gold, but not CGT-free.
Worked Examples: How Much Tax Could You Save?
Here are three real-world scenarios showing the tax difference between CGT-free and CGT-liable gold. All assume a purchase in 2020 and sale in February 2026, with the full £3,000 annual CGT allowance already used elsewhere:
Product
1oz Gold Britannia
Bought (2020)
£1,250
Sold (2026)
£3,600
Gain
£2,350
CGT Due
£0 (legal tender)
Net Profit
£2,350
Product
1oz Gold Bar
Bought (2020)
£1,200
Sold (2026)
£3,550
Gain
£2,350
CGT Due
£468 - £564
Net Profit
£1,786 - £1,882
Product
1oz Krugerrand
Bought (2020)
£1,230
Sold (2026)
£3,570
Gain
£2,340
CGT Due
£465 - £562
Net Profit
£1,778 - £1,875
CGT Calculation Explained
For the CGT-liable examples above: gain of £2,350 minus the £3,000 annual allowance = £0 if you have not used the allowance elsewhere. If the allowance is already used, the full gain is taxed at 18% (basic rate) or 24% (higher rate). At 24%, a £2,350 gain results in £564 of tax. Over multiple coins or bars, this adds up significantly.
The Chattels Exemption: Another Tax-Free Route
Individual Items Sold for Under £6,000
Even for CGT-liable gold (bars, Krugerrands, etc.), there is a separate exemption under the chattels rules (HMRC CG76550). Any individual tangible moveable asset sold for £6,000 or less is exempt from CGT entirely.
At current gold prices, a single 1oz Krugerrand (~£3,550) falls comfortably under this threshold. So does a single 1oz gold bar. This means individual coins and small bars sold for under £6,000 each are CGT-free even if they are not UK legal tender — provided each item is sold as a separate disposal.
Important: If you sell multiple identical items to the same buyer at the same time, HMRC may treat them as a single disposal. Selling 5 Krugerrands together for £17,750 would exceed the threshold. Selling them individually on different dates would keep each under £6,000.
Chattels vs Legal Tender: Which Is Better?
The legal tender exemption (Sovereigns/Britannias) is simpler and unlimited — no need to worry about the £6,000 threshold or batch sales. The chattels exemption is useful as a backup for foreign coins and small bars, but requires careful management of how you sell. For holdings over £6,000 per item, only the legal tender route provides CGT exemption.
Gold in ISAs and SIPPs
You cannot hold physical gold coins or bars inside an ISA or SIPP. The Royal Mint's “Gold ISA” does not exist — despite some misleading marketing from third parties.
However, since Sovereigns and Britannias are already CGT-free, this matters less than you might think. The main benefit of an ISA wrapper is CGT exemption — which UK coins already have.
Gold ETFs such as iShares Physical Gold (SGLN) and Invesco Physical Gold (SGLD) can be held in a Stocks & Shares ISA or SIPP. Inside the wrapper, all gains are tax-free — making ETFs a viable tax-efficient alternative for investors who prefer not to hold physical gold.
Annual fees are typically 0.12-0.19%. The 2025/26 ISA allowance is £20,000.
The Trade-Off
Physical Sovereigns/Britannias: CGT-free, no annual fees, direct ownership — but require storage and insurance (~0.5-1.5% of value per year).
Gold ETF in ISA: CGT-free inside wrapper, no storage hassle, low fees (0.12-0.19%/year) — but no physical ownership, counterparty risk, and uses up your ISA allowance.
What Premiums Should You Expect?
When buying gold coins or bars, you pay a premium above the spot gold price. This covers the dealer's margin, minting costs, and distribution. Here are typical premiums for CGT-free coins versus alternatives:
| Product | Typical Buy Premium | Typical Sell Spread | CGT Status |
|---|---|---|---|
| 1oz Gold Britannia (new) | 4-7% over spot | 1-3% below spot | CGT-Free |
| Full Gold Sovereign (new) | 5-8% over spot | 1-3% below spot | CGT-Free |
| Pre-owned Sovereign | 3-5% over spot | 1-2% below spot | CGT-Free |
| 1oz Gold Bar | 2-4% over spot | 1-2% below spot | CGT Liable |
| 1oz Krugerrand | 3-5% over spot | 1-3% below spot | CGT Liable |
| Gold ETF (e.g. iShares) | 0% (market price) | 0.1-0.3% (dealing fee) | CGT Liable (unless in ISA) |
Premiums vary by dealer and market conditions. Pre-owned coins typically carry lower premiums than newly minted. Larger quantity orders often attract reduced premiums.
VAT on Gold: What You Need to Know
VAT-Free (Investment Gold)
- ✓Gold bars of at least 995 fineness (99.5% pure)
- ✓Gold coins of at least 900 fineness, minted after 1800, that are or were legal tender
- ✓Includes Sovereigns, Britannias, Krugerrands, Maples, Eagles, and most investment coins
Subject to 20% VAT
- ✗Silver bars and coins (including Britannias)
- ✗Platinum and palladium
- ✗Gold jewellery (not classified as investment gold)
- ✗Numismatic coins sold primarily as collectibles
The VAT exemption for investment gold is derived from Schedule 8ZA of the Value Added Tax Act 1994 (originally EU Directive 98/80/EC, retained in UK law after Brexit). HMRC publishes an annual list of qualifying coins.
Gold and Inheritance Tax (IHT)
The CGT Exemption Does NOT Apply to IHT
A common misconception is that CGT-free gold is also IHT-free. It is not. All gold — Sovereigns, Britannias, bars, coins, jewellery — is included in your estate for Inheritance Tax purposes.
- Nil-rate band: £325,000 (frozen until 2030)
- Residence nil-rate band: £175,000 (if property passes to direct descendants)
- IHT rate: 40% on the estate above the nil-rate band
- Gold treatment: Valued at market price at date of death
From 6 April 2026, new rules limit Agricultural Property Relief (APR) and Business Property Relief (BPR) to the first £1 million of qualifying assets. Gold does not qualify for either relief, but these changes may push some estates over the IHT threshold, making tax planning more important.
If your total estate including gold is near the IHT threshold, consider professional estate planning advice.
Tax Year End: 5 April 2026
Planning Before 5 April
Use your CGT allowance: If you hold CGT-liable gold (bars, Krugerrands, ETFs) and have unused CGT allowance of £3,000, consider crystallising gains before 5 April. You could sell enough gold to realise a £3,000 gain tax-free, then re-purchase (the “bed and breakfast” rules require a 30-day gap or using a different gold vehicle).
Spousal transfer: Transfers between spouses are CGT-free. If your partner has unused CGT allowance, transferring gold to them before selling effectively doubles the available allowance to £6,000.
Switch to CGT-free gold: If selling CGT-liable gold, consider reinvesting the proceeds in Gold Sovereigns or Britannias to eliminate future CGT liability.
Where to Buy CGT-Free Gold in the UK
Gold Sovereigns and Britannias are widely available from reputable UK dealers. Here are your main options:
The official source for Britannias and Sovereigns. Guarantees authenticity. Offers vault storage through “The Vault” service. Higher premiums than secondary market dealers but maximum peace of mind.
Dealers like BullionByPost, Chards, Atkinsons, and Hatton Garden dealers offer competitive premiums on both new and pre-owned Sovereigns and Britannias. Pre-owned coins often carry lower premiums.
BullionVault and similar platforms allow you to buy allocated gold at low premiums. Note that gold held on platforms may not qualify for the legal tender CGT exemption — check the specific product.
Many high street dealers stock Sovereigns and Britannias. Use our dealer directory to find verified dealers near you who stock these coins.
Common Mistakes to Avoid
Assuming All Gold Coins Are CGT-Free
Only UK legal tender coins qualify. Krugerrands, Maples, Eagles, Pandas — even though they are well-known and VAT-free — are all subject to CGT. If tax efficiency is your priority, stick to Sovereigns and Britannias.
Forgetting the 30-Day Rule
If you sell gold and buy back the same or substantially similar asset within 30 days, HMRC will treat the transaction as if the sale never happened (the “bed and breakfast” rule). To crystallise a gain, wait 30 days or switch to a different gold product (e.g., sell a bar and buy Sovereigns).
Not Keeping Records
HMRC requires you to keep records of gold purchases and sales for at least 5 years after the tax year of disposal. Keep receipts, invoices, and records of the purchase price, date, and dealer for every transaction — even for CGT-free coins, in case HMRC queries the legal tender status.
Confusing CGT Exemption with IHT Exemption
The legal tender CGT exemption does not extend to Inheritance Tax. All gold forms part of your estate. Significant gold holdings should be considered in your estate planning.
Frequently Asked Questions
Investment-grade gold is VAT-free in the UK. For Capital Gains Tax, only UK legal tender gold coins (Britannias and Sovereigns) are completely CGT-exempt. Gold bars, foreign coins (Krugerrands, Maples, Eagles), and gold ETFs are all subject to CGT on gains above the annual allowance of £3,000.
No. Gold Sovereigns are classified as UK legal tender, which means they are completely exempt from Capital Gains Tax regardless of how much profit you make. There is no upper limit on this exemption. This also applies to Gold Britannias.
No. Investment-grade gold is VAT-exempt in the UK under EU-derived legislation retained after Brexit. This includes gold bars of at least 995 fineness and gold coins of at least 900 fineness that were minted after 1800 and are or have been legal tender. Silver, platinum, and palladium are subject to 20% VAT.
Yes. All gold — whether coins, bars, or ETFs — is included in your estate for inheritance tax purposes. The IHT nil-rate band is frozen at £325,000 until 2030. Gold does not qualify for any IHT reliefs unless held through certain business structures. The CGT exemption for Sovereigns and Britannias does NOT extend to inheritance tax.
The Capital Gains Tax annual exempt amount for the 2025/26 tax year is £3,000. This means you can make up to £3,000 in total capital gains (across all assets, not just gold) before paying CGT. Above this, gains are taxed at 18% for basic rate taxpayers or 24% for higher rate taxpayers.
Krugerrands are VAT-free (as investment gold) but they are NOT CGT-free. Only UK legal tender coins — Gold Britannias and Gold Sovereigns — are exempt from Capital Gains Tax. South African Krugerrands, Canadian Maples, American Eagles, and all other foreign coins are subject to CGT on gains above £3,000.
Check Today's Gold Prices
Gold Sovereigns and Britannias are currently trading at historically high levels. Use our calculator to see today's values.
Related Guides
Sources & HMRC References
- Capital Gains Tax Act 1992, Section 21 — Legal tender exemption
- HMRC Capital Gains Manual CG12600 — Currency and legal tender
- HMRC Capital Gains Manual CG76550 — Chattels: tangible moveable property
- HMRC — VAT on investment gold (qualifying coins list)
- Value Added Tax Act 1994, Schedule 8ZA — Investment gold VAT exemption
- HMRC — CGT rates and allowances 2025/26
- HMRC — Inheritance Tax thresholds and rates
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Tax treatment depends on individual circumstances and may be subject to change. The tax information provided is based on current HMRC guidance and could change in the future. Always verify tax information with HMRC or a qualified tax professional.