Is Gold CGT-Free in the UK? Coins, Bars and Tax Explained
The short answer is: it depends on what you buy. Some gold is completely exempt from Capital Gains Tax in the UK, with no limit on the profit you can make. Other gold is fully subject to CGT, just like shares or investment property. Understanding the distinction before you buy is one of the most important decisions a UK bullion investor can make.
What Is Capital Gains Tax and When Does It Apply to Gold?
Capital Gains Tax is charged on the profit you make when you sell an asset that has increased in value. With gold, HMRC taxes the gain rather than the sale proceeds. If you bought a gold bar for £5,000 and sold it for £7,500, CGT applies to the £2,500 profit, not to the full £7,500.
For the 2025/26 tax year, every individual has a CGT annual exempt amount of £3,000. Gains below this threshold across all taxable assets in the year attract no CGT. Gains above it are taxed at 18% if you are a basic-rate taxpayer, or 24% if you fall into the higher or additional rate band. Declaring and paying any CGT owed is the responsibility of the individual investor, not the bullion dealer.
The Legal Tender Exemption: Why Some Gold Is CGT-Free
The reason certain gold coins are exempt from CGT is rooted in UK statute. Under s.21(1)(b) of the Taxation of Chargeable Gains Act 1992, sterling currency is not a chargeable asset for CGT purposes. Gold coins that are legal tender in the UK are classified as sterling currency by HMRC. This is confirmed in HMRC Capital Gains Manual CG78305, which states explicitly that post-1837 Sovereigns and Britannia coins "are currency but, like all sterling currency, are exempt." The exemption applies regardless of how large the gain is. You can make £500,000 in profit on CGT-free coins and owe nothing, regardless of whether you have already used your annual exempt amount on other assets.
Which Gold Coins Are CGT-Free?
All bullion coins produced by The Royal Mint that carry a face value denominated in sterling qualify for this exemption. The most widely held are as follows.
The Gold Sovereign (post-1837) is the most divisible CGT-free coin on the market. A full Sovereign weighs 7.98g with 7.32g of pure gold at 22ct (91.67% purity) and carries a face value of £1. It is also available in Double (£2), Half (50p) and Quarter (25p) denominations, making it the most flexible entry point for investors building a holding gradually.
The Gold Britannia is the UK's flagship 1oz bullion coin, struck in 999.9 fine (24ct) gold with a gross weight of 31.1g and a face value of £100. It is available in 1/2oz, 1/4oz and 1/10oz versions. At full ounce, it is the most internationally recognised of the CGT-free coins.
The Silver Britannia carries a face value of £2. Despite being a silver coin, its legal tender status confers the same CGT exemption. Note that 20% VAT applies on purchase, which affects the return profile relative to gold.
The Platinum Britannia carries a face value of £100 and is equally exempt. It is less widely traded than gold and silver coins but benefits from the same legal basis.
The Queen's Beasts and Tudor Beasts series, also produced by The Royal Mint with sterling face values, are CGT-free on the same grounds.
Pre-1837 Sovereigns are no longer legal tender. They may still qualify for a separate exemption under TCGA92/S262 (the chattels exemption), but only where the disposal proceeds for an individual coin do not exceed £6,000. The chattels exemption does not apply to non-sterling foreign coins. Seek professional advice before selling pre-1837 coins.
Which Gold Is NOT CGT-Free?
Gold bars carry no CGT exemption regardless of size, brand or purity. A gain on a 100g bar is treated in exactly the same way as a gain on shares: it counts toward your £3,000 annual exempt amount, and anything above it is taxed at 18% or 24%. The same applies to non-UK bullion coins. HMRC CG78305 is explicit: coins that are currency but not sterling currency are chargeable assets. Their legal tender status in their country of origin is irrelevant under UK law. This applies to all of the following:
- Krugerrand (South Africa)
- Canadian Maple Leaf
- American Gold Eagle
- Austrian Philharmonic
- Australian Kangaroo / Nugget
Using the £3,000 Allowance Strategically
For investors who hold taxable gold such as bars or foreign coins, the annual exempt amount provides a planning tool. By spreading disposals across multiple tax years and keeping gains within the £3,000 threshold each year, it is possible to reduce or eliminate the CGT liability on a larger holding. This approach requires accurate records of your purchase prices and dates, kept from the point of acquisition.
Gold prices in 2025 and 2026 have reached historic levels. Gains on bullion acquired several years ago can now be substantial, and the reduction in the annual exempt amount from £12,300 in 2022/23 to £3,000 today makes this planning more consequential than it was for earlier generations of investors.
VAT and CGT: Two Separate Questions
VAT and CGT operate independently and should not be conflated. Investment gold, including both CGT-free Royal Mint coins and taxable bars, is exempt from VAT at the point of purchase in the UK. This is established under HMRC VAT Notice 701/21. The CGT question only arises when you sell. The two treatments do not affect each other.
Silver bullion is subject to 20% VAT on purchase regardless of its CGT status, as confirmed in VAT Notice 701/21A. The Silver Britannia is CGT-free, but VAT still applies on the way in. This is a meaningful cost: you need the silver price to rise by more than 20% before you recover the VAT paid, before any profit is made. It is one of the key reasons gold coins remain the more tax-efficient choice for most UK investors.
This article is for educational purposes only and does not constitute financial or tax advice. Tax rules can change. Always seek guidance from a qualified adviser before making investment decisions.
Fitzroy Bullion stocks a full range of CGT-free Royal Mint coins, including Gold Sovereigns, Gold Britannias and Silver Britannias.