Gold and Precious Metals Investing Tax: A Complete UK Guide for 2026/27
UK legal tender gold coins are exempt from Capital Gains Tax, gold bars and ETFs are not, and silver loses the VAT exemption that gold enjoys. This guide explains how each route into precious metals is taxed, so you can choose the most tax-efficient way to hold gold or silver.
Gold and silver coins that are UK legal tender — most notably the Royal Mint's gold and silver Britannia and Sovereign coins — are exempt from Capital Gains Tax entirely, however much they have risen in value, because legal tender currency falls outside the scope of chargeable assets for CGT. This makes them one of the few genuinely tax-free ways to hold a physical, tangible asset in the UK, with no annual exempt amount to use up and no gain to report.
Gold Bars and Non-Exempt Coins
Gold bars, and coins that are not UK legal tender (such as South African Krugerrands or American Eagles), do not benefit from the CGT exemption. Gains on selling these are chargeable, using the £3,000 annual exempt amount for 2026/27, with residual gains taxed at 18% for basic rate taxpayers and 24% for higher and additional rate taxpayers on "other assets" rates.
VAT on Gold vs Silver
Investment-grade gold — bars of at least 995 purity and coins of at least 900 purity meeting the criteria of the Gold Investment Exemption — is exempt from VAT when bought in the UK, meaning no VAT is added to the purchase price. Silver does not benefit from an equivalent exemption, so standard-rate VAT at 20% is generally charged on physical silver bullion, which significantly increases its effective cost as an investment compared with gold.
Gold ETFs and ETCs
Gold Exchange-Traded Commodities (ETCs), which track the gold price without holding physical metal directly yourself, are treated as securities for tax purposes rather than as the metal itself. Gains are subject to Capital Gains Tax under the normal share rules, using the £3,000 annual exempt amount, but crucially these products can be held inside a Stocks and Shares ISA, sheltering gains from CGT entirely, unlike physical gold or coins.
Gold Mining Shares
Shares in gold mining companies are ordinary listed shares for tax purposes, taxed under the standard Capital Gains Tax rules on disposal and the dividend tax rules (£500 dividend allowance, then 10.75%/35.75%/39.35% depending on your Income Tax band) on any dividends received. Like gold ETCs, mining shares can be held in a Stocks and Shares ISA or SIPP to shelter both gains and dividend income from tax.
Can Gold Be Held in an ISA?
Physical gold, even CGT-exempt UK legal tender coins, cannot be held directly within a Stocks and Shares ISA, because ISAs are designed to hold securities such as shares, bonds and funds, not physical commodities. Investors who want ISA tax-shelter benefits alongside gold exposure typically use a gold ETC, a gold mining fund, or shares in gold mining companies instead of holding bullion directly.
Reporting Gains to HMRC
No reporting is needed for gains on CGT-exempt legal tender coins, since there is no chargeable gain to declare. For gold bars, non-exempt coins, ETCs held outside an ISA, or mining shares, you need to calculate and report any gain if your total gains across all chargeable assets in the tax year exceed the £3,000 annual exempt amount, either through Self Assessment or the Capital Gains Tax real-time service.
Are gold coins free of Capital Gains Tax in the UK?
UK legal tender coins, such as gold and silver Britannias and Sovereigns minted by the Royal Mint, are exempt from Capital Gains Tax because they are legal tender currency, regardless of how much their value has risen since purchase.
Why are Britannias and Sovereigns CGT-exempt but gold bars are not?
The exemption applies specifically to UK legal tender currency. Gold bars, foreign coins that are not UK legal tender, and other bullion products do not qualify, so any gain on selling them is potentially subject to Capital Gains Tax like other investment assets, using the £3,000 annual exempt amount.
Do I pay VAT when buying physical gold?
No. Investment-grade gold (coins and bars meeting a minimum purity, generally 995 for bars and 900 for coins) is exempt from VAT in the UK under the Gold Investment Exemption, so buying physical investment gold does not attract VAT.
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Is silver treated the same as gold for VAT?
No. Silver does not benefit from the same VAT exemption as investment gold, so standard-rate VAT at 20% is typically charged on physical silver coins and bars bought in the UK, which is one reason silver bullion is a less common vehicle for large UK investors.
How are gold ETFs and ETCs taxed?
Gold Exchange-Traded Commodities (ETCs) and similar gold-backed exchange-traded products are treated as shares for tax purposes, so gains are subject to Capital Gains Tax using the £3,000 annual exempt amount, but they can typically be held inside a Stocks and Shares ISA to shelter gains entirely.
Can I hold physical gold coins in an ISA?
No. Physical gold, even CGT-exempt UK legal tender coins, cannot be held directly inside a Stocks and Shares ISA; only gold-backed securities such as ETCs, gold mining shares, or gold funds qualify for ISA wrapping.
Do I need to report gold sales to HMRC?
If you sell CGT-exempt UK legal tender coins, there is no gain to report since the exemption applies regardless of profit. For non-exempt items like bars or foreign coins, you must report and potentially pay Capital Gains Tax if your total gains across all assets in the tax year exceed the £3,000 annual exempt amount.
What about gold mining company shares?
Shares in gold mining companies are ordinary company shares for tax purposes, taxed under the normal Capital Gains Tax and dividend tax rules, and can be held inside a Stocks and Shares ISA or SIPP like any other listed share.
Is gold a good hedge against inflation?
Gold is often held as a diversifier and perceived inflation hedge because its price is not directly tied to the performance of shares or bonds, though its price can still be volatile in the short term and it produces no income, unlike dividend-paying shares or interest-bearing savings.
Where can UK legal tender gold coins be bought CGT-exempt?
The Royal Mint and other reputable bullion dealers sell CGT-exempt gold and silver Britannia and Sovereign coins directly to UK investors; always check a dealer's credentials and that the coins are genuine UK legal tender before relying on the exemption.
Disclaimer: Precious metal prices can be volatile and produce no income. This guide is general information, not financial or tax advice. Always check the current position at gov.uk or seek independent professional advice for your specific situation.
