---
title: "Capital Gains Tax on Gold and Silver"
source: "https://goldealers.co.uk/knowledge/tax-vat/capital-gains-tax"
date: "2025-12-02"
---

# Capital Gains Tax on Gold and Silver

Capital Gains Tax (CGT) is the most relevant tax consideration for investors holding precious metals in the UK. This comprehensive guide explains how CGT applies to gold, silver, platinum, and palladium, which assets enjoy exemptions, and how to calculate and report gains. Understanding these rules helps you make informed decisions when selling to dealers like Goldealers.

> **Tax Disclaimer**: This guide provides general information based on current UK tax law. Individual circumstances vary, and tax rules change. Always consult a qualified accountant or HMRC for advice specific to your situation.

## What Is Capital Gains Tax?

CGT is a tax on the **profit** you make when selling an asset that has increased in value since you acquired it:

### The Basic Principle

**Formula**: 
- Capital Gain = Sale Proceeds - Acquisition Cost - Allowable Expenses
- Tax Due = Taxable Gain × CGT Rate

**Example**:
- You bought a gold bar for £5,000 in 2015
- You sell it in 2025 for £8,000
- Your gain: £8,000 - £5,000 = **£3,000**

### CGT Rates (2024/25 Tax Year)

**Annual Exempt Amount**: £3,000 per individual
- First £3,000 of gains each tax year is tax-free
- Only gains above this threshold are taxed

**Tax Rates on Gains Above Exemption**:
- **10%**: Basic rate taxpayers
- **20%**: Higher and additional rate taxpayers

**Tax Year**: April 6 to April 5

> The annual exempt amount has been significantly reduced in recent years (from £12,300 in 2022/23 to £3,000 in 2024/25). This means more investors may now face CGT on their gains.

## Which Precious Metals Are CGT-Exempt?

Several categories of precious metals enjoy exemption from CGT:

### 1. UK Legal Tender Gold Coins

**Completely exempt** from CGT:

**Gold Sovereigns**:
- Full Sovereign
- Half Sovereign
- Double Sovereign
- Five Sovereign (rare)

**Gold Britannias**:
- 1oz Britannia
- Fractional Britannias (1/2oz, 1/4oz, 1/10oz)

**Why Exempt**: HMRC treats UK legal tender coins as currency, not investment assets

**Practical Impact**: 
- Any profit on these coins is **tax-free**
- No matter how large the gain
- No reporting required
- Makes them attractive for investors

**Example**: You bought 20 Gold Sovereigns for £6,000 in 2010 and sell them for £12,000 in 2025. Profit: £6,000. **CGT due: £0**.

For more information, see our guide on [selling Gold Sovereigns](/knowledge/bullion/selling-gold-sovereigns).

### 2. Personal Jewellery (Wasting Chattels)

**Generally exempt** from CGT:

**What Qualifies**:
- Jewellery worn for personal use
- Items with expected life under 50 years
- Even high-value pieces typically qualify

**Examples**:
- Wedding rings, engagement rings
- Necklaces, bracelets, earrings
- Watches (most)
- Decorative items worn or used personally

**Why Exempt**: Classified as "wasting chattels" with limited useful life

> The wasting chattel exemption is generous. Even if you never actually wore expensive jewellery, if it was acquired for personal use (not investment), it usually qualifies for exemption.

### 3. Chattels Sold for Under £6,000

**Exempt** from CGT:

**Rule**: Individual items sold for £6,000 or less

**Important**: This is per **individual item**, not total sale

**Example**:
- You sell 5 gold rings at £1,200 each (£6,000 total)
- Each ring is under £6,000 individually
- **All exempt** from CGT

**Marginal Relief**: For items sold between £6,000 and £15,000, special marginal relief rules may apply to reduce CGT (complex calculation, consult an accountant).

## Which Precious Metals ARE Subject to CGT?

### 1. Gold Bars

**All gold bars** are potentially subject to CGT:

- Small bars (1g to 100g)
- Standard bars (250g, 500g)
- Large bars (1kg, kilobars)
- Any fineness (though investment bars are typically 999.9)

**Why Taxable**: Investment assets, not legal tender or personal chattels

**Example**: 
- 100g gold bar bought for £4,000
- Sold for £6,500
- Gain: £2,500 (under £3,000 allowance, likely no tax)

### 2. Foreign Gold Coins

**Non-UK legal tender coins** are subject to CGT:

**Common Examples**:
- Krugerrands (South African)
- American Gold Eagles
- Canadian Gold Maple Leafs
- Australian Nuggets/Kangaroos
- Chinese Pandas
- Austrian Philharmonics

**Even Though**: These may be legal tender in their country of origin, HMRC doesn't recognize them as UK currency

> A common mistake is assuming all gold coins are CGT-free. Only **UK** legal tender coins (Sovereigns, Britannias) qualify for exemption. Foreign coins, even from Commonwealth countries, do not.

### 3. Silver (All Forms)

**Silver** generally **does not** enjoy CGT exemption:

**Silver Coins**:
- Silver Britannias (NOT exempt, despite being UK legal tender*)
- Foreign silver coins (Maple Leafs, Eagles, etc.)

**Silver Bars**:
- All investment silver bars
- Sterling silver items (unless personal chattels under £6,000)

***Special Note on Silver Britannias**: Unlike gold Britannias, silver Britannias are NOT typically CGT-exempt because the face value (£2) is below the £1 legal tender threshold that triggers the exemption. This is a nuance in tax law.

**Practical Impact**: Silver investors face CGT on gains above £3,000 annual allowance

### 4. Platinum and Palladium

**All platinum and palladium** subject to CGT:

- Platinum bars and coins
- Palladium bars and coins
- No UK legal tender coins exist in these metals (at time of writing)

**Example**: A platinum ring (unless personal jewellery qualifying as wasting chattel) sold at a gain may be subject to CGT

## Calculating Your Capital Gain

Step-by-step calculation:

### Step 1: Determine Sale Proceeds

**What You Received** from selling:
- Amount Goldealers or another dealer paid you
- Or price achieved if sold privately

**Include**: All amounts received for the metal

**Exclude**: Amounts for non-precious parts (e.g., gemstones if sold separately)

### Step 2: Establish Acquisition Cost

**What You Paid** to acquire the gold/silver:

**If Purchased**:
- Purchase price paid
- Include VAT if paid (e.g., on silver)

**If Inherited**:
- Market value at date of death of the deceased
- Not what they originally paid

**If Gifted**:
- Usually the market value when gifted to you
- Complex rules apply; seek advice if significant value

### Step 3: Deduct Allowable Expenses

**Allowable Costs**:
- Purchase commissions or premiums paid
- Delivery or postage costs
- Professional valuations (e.g., for inheritance)
- Selling costs (dealer margin, postage when selling)

**Example**:
- You bought gold for £5,000
- Paid £50 delivery
- Sold for £8,000 (Goldealers paid £7,800, 2.5% margin = £200 cost)
- **Acquisition cost**: £5,000 + £50 = £5,050
- **Net proceeds**: £8,000 (or you could argue £7,800 if dealer margin is cost)
- **Gain**: £8,000 - £5,050 - £200 = **£2,750**

### Step 4: Apply Annual Exemption

**Deduct £3,000** (2024/25) from your total gains for the year:

- Gain of £2,750: Under exemption, **no tax due**
- Gain of £5,000: £5,000 - £3,000 = £2,000 taxable
- Multiple gains in year: Sum all gains, then deduct £3,000 once

### Step 5: Calculate Tax

**Apply Your Rate**:
- Basic rate (£12,571 to £50,270 income): **10%** on gains
- Higher rate (£50,271 to £125,140 income): **20%** on gains
- Additional rate (over £125,140 income): **20%** on gains

**Example**:
- Taxable gain: £5,000
- You're a higher rate taxpayer
- **CGT due**: £5,000 × 20% = **£1,000**

> Your CGT rate depends on your **income tax band**. If gold gains push you from basic into higher rate, the portion in higher rate is taxed at 20%.

## Special Rules and Complications

### Same Day and Bed & Breakfast Rules

**To prevent tax avoidance**, special identification rules apply:

**If You Buy and Sell Same Asset**:
- **Same day**: Sales matched with purchases on same day
- **Next 30 days**: Sales matched with purchases in following 30 days
- **Prevents**: Selling at a gain, immediately buying back to use CGT allowance

**Practical Impact**: If selling gold bars with a view to repurchase, wait over 30 days (or use spouse to buy)

### Multiple Acquisitions (Pooling)

**If you bought similar items at different times**, calculate average cost:

**Example**:
- Bought 10g gold bar for £400 in 2015
- Bought another 10g bar for £600 in 2020
- Average cost: (£400 + £600) ÷ 2 = £500 per bar
- Sell one bar in 2025 for £750
- Gain: £750 - £500 = £250

This "pooling" method applies when you can't identify specific items

### Part Disposals

**If you sell part of a holding**:

**Formula**: 
- Allowable cost = Original cost × (Value of part sold ÷ Value of whole holding)

**Example**:
- You have 100g gold bar worth £5,000 (cost £4,000)
- You sell 20g for £1,000
- Allowable cost: £4,000 × (£1,000 ÷ £5,000) = £800
- Gain: £1,000 - £800 = £200

## Reporting and Payment

### When You Must Report

**Report to HMRC if**:

1. **Total taxable gains** for the year exceed £3,000, OR
2. **Total proceeds** from all disposals exceed £12,000 (4 × annual exemption)

**Even if** no tax due after exemptions, you must report if proceeds are high

### How to Report

**Self-Assessment Tax Return**:
- Complete SA100 (main return)
- Include SA108 (Capital Gains summary pages)
- Report each disposal or aggregate if many small ones
- Calculate total gains and tax due

**Online or Paper**: Can file online (easier) or paper

**Deadline**: 
- Online: 31 January following end of tax year
- Paper: 31 October following end of tax year

**Payment Due**: 31 January (same deadline as online filing)

> Late filing or payment incurs penalties and interest. If you have reportable gains, register for Self-Assessment early if not already registered.

### What Information to Provide

**For Each Disposal** (or grouped disposals):
- Description of asset (e.g., "100g gold bar")
- Date acquired
- Date sold
- Proceeds (what you received)
- Costs (acquisition cost plus allowable expenses)
- Gain or loss

**Keep Records**:
- Purchase receipts
- Sales receipts (from Goldealers, etc.)
- Correspondence about valuations
- Calculations

## Strategies to Minimise CGT

Legal methods to reduce tax on precious metals:

### 1. Invest in CGT-Free Assets

**Choose UK legal tender gold coins**:
- Buy Sovereigns or Britannias instead of bars
- Pay a small premium when buying, save tax when selling
- Particularly valuable for large holdings

**Comparison**:
- £50,000 in gold bars: Potential CGT on gains
- £50,000 in Sovereigns: No CGT ever

### 2. Use Annual Exemptions Strategically

**£3,000 per person per tax year** is tax-free:

**Spread Sales**:
- Large holding? Sell over multiple tax years
- Use each year's £3,000 allowance
- Plan sales to stay under threshold

**Example**:
- You have £20,000 gain potential on gold bars
- Sell portion in April 2025 (£3,000 gain) – no tax
- Sell more in April 2026 (£3,000 gain) – no tax
- Continue over subsequent years

### 3. Transfer to Spouse

**Transfers between married couples or civil partners are CGT-free**:

**Strategy**:
- Gift gold to spouse before selling
- Each spouse gets £3,000 allowance
- Combined: £6,000 tax-free per year

**Example**:
- You have £8,000 gain on gold bars
- Transfer half to spouse (no CGT on transfer)
- Each sells your half (£4,000 gain each)
- Each uses £3,000 allowance
- Only £1,000 × 2 = £2,000 taxable (vs £5,000 if you sold alone)

**Must Be Genuine**: Can't be a sham; spouse must truly own the asset

### 4. Offset with Losses

**Capital losses** from other assets can offset gold gains:

**Examples of Losses**:
- Shares sold at a loss
- Investment property sold below purchase price
- Other precious metals sold at loss

**How It Works**:
- Total your gains (e.g., £8,000 gold gain)
- Total your losses (e.g., £3,000 shares loss)
- Net gain: £5,000
- Apply annual exemption: £5,000 - £3,000 = £2,000 taxable

**Carry Forward Losses**: Unused losses can be carried forward indefinitely to use in future years

> If you have other investments at a loss, consider realising those losses in the same tax year you sell gold at a gain to offset the CGT bill.

### 5. Time Sales in Low-Income Years

**CGT rate depends on your income**:

**Lower Rate (10%) Applies If**:
- Your income + gains fall below higher rate threshold (£50,270 for 2024/25)

**Strategy**:
- Sell gold in a year when your income is lower (e.g., after retirement, during career break)
- Pay 10% instead of 20% on gains

**Example**:
- Usually earn £70,000 (higher rate taxpayer)
- Take a sabbatical year, earn £20,000
- Sell gold that year, pay 10% CGT instead of 20%

### 6. Consider Charitable Donations

**Giving assets to charity**:
- No CGT on the gift itself
- May get income tax relief too
- Relevant if philanthropically inclined

**Not Common**: Most people prefer to sell and donate cash, but this is an option

### 7. Plan for Inheritance

**On Death**:
- CGT doesn't apply (your heirs inherit at probate value)
- Inheritance Tax may apply instead

**Strategy**: If very elderly/ill and holding large gains, passing gold via estate may avoid CGT (though IHT rules apply to the estate)

## CGT on Inherited Precious Metals

Special considerations:

### Inheriting Gold/Silver

**When You Inherit**:
- **No CGT** at the point of inheritance
- You acquire at "probate value" (market value at date of death)
- This becomes your "cost" for CGT if you later sell

**Example**:
- Grandfather died in 2020, left you gold bars
- Probate value (at his death): £10,000
- You sell in 2025 for £15,000
- **Your gain**: £15,000 - £10,000 = £5,000 (not £15,000)

### Selling Soon After Inheritance

**If you sell shortly after inheriting**:
- Little or no gain (value hasn't changed much)
- Often under £3,000 exemption
- **Usually no CGT due**

### Selling Long After Inheritance

**If you hold for years before selling**:
- Gain since inheritance date may be substantial
- CGT may be payable

**Records**: Executors should provide you with probate valuation; keep this for your CGT calculation

## Common Questions

**Q: If I don't make a profit, do I still need to report?**

A: If you make a loss, you don't have to report unless your total proceeds exceed £12,000. However, reporting a loss can be beneficial – you can use the loss to offset future gains.

**Q: Can I gift gold to children to avoid CGT?**

A: Gifts to anyone other than a spouse are treated as deemed disposals at market value, triggering CGT if you have gains. The recipient then acquires at that market value. Gifting doesn't avoid CGT unless done carefully with professional advice.

**Q: What happens if I don't report but should have?**

A: HMRC can charge penalties and interest. Penalties range from percentage of tax owed (up to 100% for deliberate concealment). If you've made an honest mistake, disclose voluntarily to minimise penalties.

**Q: Do I pay CGT and income tax on the same gold sale?**

A: No. Selling personal assets is a CGT matter, not income. Only if you're trading in gold as a business would income tax apply instead of CGT.

**Q: Are gold ETFs or digital gold subject to CGT?**

A: Yes, financial products tracking gold (ETFs, funds, digital holdings) are investment assets subject to CGT. Only physical UK legal tender coins enjoy exemption.

## Record-Keeping Requirements

### What to Keep

**Purchase Records**:
- Invoices showing amount paid
- Dates of purchase
- Description of items

**Sale Records**:
- Goldealers' receipt
- Date of sale
- Amount received

**Supporting Documents**:
- Valuations (if inherited)
- Correspondence regarding gifts
- Records of expenses (postage, testing fees)

### How Long to Keep

**HMRC Guidance**: Keep for at least **6 years** after the tax year of disposal

**Recommendation**: Keep indefinitely, especially for:
- Large transactions
- Inherited assets (may be decades before you sell)
- Complex calculations

**Digital Copies**: Scan/photograph receipts and store securely

## Planning for Multiple Assets

### Portfolio Approach

**If you hold multiple precious metal types**:

**CGT-Free Portion**:
- Sovereigns, Britannias (no matter how much)

**CGT-Liable Portion**:
- Bars, foreign coins

**Strategy**:
- Sell CGT-free assets first if needing cash
- Hold CGT-liable assets longer or sell in planned manner

### Diversification for Tax Efficiency

**Example Portfolio**:
- 60% in Gold Sovereigns (CGT-free)
- 40% in gold bars (flexible, but CGT-liable)

**Rationale**:
- Most holdings are tax-advantaged
- Bars provide flexibility (larger units, easier for very large holdings)
- When selling, prioritise Sovereigns for tax efficiency

## Final Thoughts

Capital Gains Tax on precious metals isn't as daunting as it may seem:

**Key Takeaways**:
- **UK gold coins are CGT-free** – a major advantage
- **£3,000 annual allowance** covers many sales
- **Personal jewellery is typically exempt**
- **Planning and spreading sales** can minimise or eliminate tax

For most individuals selling modest amounts to Goldealers, CGT will not apply. For investors with larger holdings or significant gains, understanding the rules and planning strategically can substantially reduce your tax bill.

At Goldealers, we provide clear documentation for all sales to support your tax reporting. While we can't give tax advice, we're happy to answer questions about your transactions and provide any additional paperwork you need.

> When in doubt, consult a tax professional. The cost of good advice is almost always less than the cost of getting your CGT wrong, and proper planning can save substantially more than advisory fees.

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**Selling precious metals and need documentation?** Goldealers provides detailed receipts for every transaction. [Contact us](/contact) for a quote and professional service that supports your tax compliance.

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*Published by Goldealers Ltd · https://goldealers.co.uk/knowledge/tax-vat/capital-gains-tax*