Our UK bullion coins, including The Sovereign, Britannia, Lunar and Queen’s Beasts, are exempt from UK Capital Gains Tax (CGT) for UK residents only due to being legal tender.
CGT is tax levied in the UK on the profit made on disposal of assets. It differs from Income Tax in that only the gain is taxable. The cost of acquiring the asset is deducted from any calculation, as is the annual exemption limit (which for 2018-19 is of £11,700).
This contrasts with the majority of assets, the profits on the sale of which are liable for CGT. These include paintings, antiques, most shares and any property other than someone’s main residence.
Thus in order to have to pay CGT on the sale of gold, a British or UK resident buyer subject to British taxes would need to have made more than £11,700 profit on the sale of their assets during one year.
Of course, someone could be selling gold bullion acquired many years earlier when the price was much lower, making it more likely that they would be exposed to CGT. This likelihood would be increased further if the sale of other assets, such as a second home or a valuable painting, had used up much or all of the exemption.
In that event, CGT would be levied at either 18 per cent or 28 per cent on gains made since June 22, 2010, depending on the person’s taxable income. Gains made on or before June 22, 2010, are taxed at 18 per cent.
Capital Gains Tax exempt gold and silver coins
The good news for bullion buyers is that legal tender is exempt from CGT in the UK, meaning that coins such as The Sovereign, Britannia, Lunar and Queen’s Beasts do not attract the tax in the UK. This exemption applies regardless of the profit made on the purchase and sale of gold bullion coins in any quantity and over any time period. Royal Mint Bullion also offers international bullion coins such as the Canadian Maple and the Krugerrand. Because these coins are not legal tender in the UK – they are not CGT exempt.
The Sovereign, The Royal Mint’s flagship gold coin, is struck in 22 carat gold and is one of the world’s greatest gold coins, tightly specified, accurate and one of the most trusted for more than 500 years. As they are legal tender British gold Sovereigns are not subject to Capital Gains tax (CGT).
Since it was launched in 1987, the Britannia coin, with the legendary figure of Britannia, has symbolised Britain’s strength and integrity. Today, our Britannia gold and silver coins are struck in 999.9 fine gold and 999 fine silver. The famous 1oz Britannia has a face value of £100 and is also available in half ounce, quarter ounce and tenth ounce coins which have denomination values of £50, £25 and £10 respectively and are not subject to Capital Gains tax (CGT).
The Lunar range was first released in 2014 marking the Lunar Year of the Horse. It was the first in a series of twelve following the lunar calendar and artist Wuon-Gean Ho and was later followed by the Lunar Year of the Sheep, The Monkey and The Rooster. These bullion coins contain one ounce of fine gold or silver and are not subject to Capital Gains tax (CGT).
The Queen’s Beasts
The Queen’s Beasts range of bullion coins are the latest addition to the Royal Mint bullion range. As well as being available in both 1 oz and 1/4 oz gold, a 2 oz silver version is also included in the range. When the first in the Queen’s Beasts series, The Lion, was released, it marked the first time in which an official 2 oz United Kingdom silver bullion coin had been struck. As they are legal tender, the Queen’s Beasts coins are also not liable to Capital Gains Tax (CGT).
Finally, should someone be liable to CGT, remember that losses on the sale of assets can be set against gains before the final calculation is made.