How to Invest in Gold and Silver in the UK Without Falling into the Tax Trap

Last updated: September 2026 (2026/27 tax year)

Buy £1,200 of silver from a UK dealer and about £200 of it is VAT, paid before the price has moved a penny. Sell gold bars at a £10,000 profit and you could hand up to £1,680 to HMRC. Make the same profit on gold Britannia coins and the tax bill is £0. The difference isn’t the metal. It’s the form you hold it in.

This guide explains how gold and silver are taxed in the UK for 2026/27, which coins and products are free of VAT and Capital Gains Tax (CGT), and where the most common traps are.

Gold and silver in the UK: the tax rules at a glance

Before you buy anything, ask two questions: will I pay VAT when I buy, and will I owe CGT when I sell? The table answers both.

VAT: why gold and silver are treated differently

The standard rate of VAT in the UK is 20%. Investment gold is exempt from it. Silver, platinum and palladium aren’t.

What counts as “investment gold” for HMRC

• Bars and wafers: at least 995 thousandths pure, in a weight accepted by the bullion markets.
• Coins: minted after 1800, at least 900 thousandths pure, legal tender (now or in the past) in their country of origin, and normally sold for no more than 180% of the value of the gold they contain.

That last condition rules out rare collector coins sold far above their metal value. HMRC also keeps a list of coins that meet the conditions in VAT Notice 701/21A.

Silver and the 20% trap

There’s no silver version of the investment gold exemption. New silver coins and bars from a VAT-registered dealer come with 20% on top.

Example: Sarah buys new silver coins. The metal in them is worth about £1,000, but she pays £1,200 because of VAT (before the dealer’s premium). When she sells, the dealer buys back at a price close to the metal value, not £1,200. So the silver price has to rise by about 20% just for her to get her money back, and the spread needs even more.

Two ways some investors reduce this cost:

• Second-hand silver: some dealers sell under the second-hand goods margin scheme, where VAT is charged only on the dealer’s margin, not the full price.
• A silver ETC in an ISA: the exchange-traded product tracks the silver price with no VAT on purchase, and gains inside an ISA are tax-free.

Watch out: the word “investment” in a product description doesn’t decide the tax treatment. If a dealer charges unexpected VAT on gold, ask for a written explanation. With silver, 20% VAT is normal, not a mistake.

Capital Gains Tax: a small allowance and 0% coins

CGT is paid on the profit when you sell an asset. For 2026/27 the rules are:

• Annual Exempt Amount: £3,000 a year. It was £12,300 in 2022/23, £6,000 in 2023/24 and has been £3,000 since 2024/25.
• Rates: 18% on the part of the gain within the basic rate band and 24% on the part above it. Since 30 October 2024 these rates apply to all assets, gold included.
• The £3,000 allowance covers all your taxable gains for the year (shares, crypto, gold), not gold separately.

Which coins are exempt from CGT

Coins that are legal tender in sterling are treated as British currency and are free of CGT for people who live in the UK for tax purposes. These are The Royal Mint coins:

• Gold Sovereign: 22 carat, about 7.32g of pure gold, face value £1. Small and easy to sell, but some years sell with a collector premium.
• Gold Britannia: 24 carat, in 1oz and smaller sizes. Face value £100 for 1oz.
• Silver Britannia: also CGT-exempt, but with 20% VAT when you buy.

Not exempt: gold bars, Krugerrands, Maple Leafs, American Eagles, Vienna Philharmonics and Royal Mint DigiGold. The Royal Mint itself states that DigiGold is subject to CGT.

Example: James is a higher-rate taxpayer. In 2026/27 he sells gold bars at a £10,000 profit and has no other taxable gains. The taxable amount is £10,000 – £3,000 = £7,000, and the tax is £7,000 × 24% = £1,680. If the same profit had come from gold Britannia coins, the tax would have been £0.

Ways to hold gold in the UK

1. Physical coins and bars

Examples of UK dealers include The Royal Mint, BullionByPost, Chards and Baird & Co. These are examples, not recommendations. Compare the premium, delivery, storage and buy-back price. Gold sold through social media and classified ads carries a high risk of fakes.

2. Gold ETCs

Exchange-traded commodities give you exposure to the gold price without storing metal yourself. As of September 2026, the published annual fees (TER) are:

• iShares Physical Gold ETC (SGLN): 0.12%
• Invesco Physical Gold ETC (SGLP): 0.12%
• WisdomTree Physical Gold (PHAU): 0.39%

Your platform may add dealing, custody and currency conversion fees. Check the Key Information Document (KID) and whether the product is ISA-eligible on your platform.

3. Royal Mint DigiGold

You buy a fraction of large bars held in The Royal Mint’s vault, from £25. The metal is pool allocated: you legally own a share of a pooled holding, not a specific bar. Storage costs 0.5% + VAT a year on the average daily value, and 1% is deducted when you sell back. DigiGold can’t be held in an ISA and is subject to CGT. Royal Mint bullion products aren’t FCA-regulated investments, so the FSCS and the Financial Ombudsman Service don’t cover them the way they cover regulated investments.

4. Gold mining shares

Fresnillo and Barrick Mining are examples. Their share prices depend on costs, debt, management and political risk, not just the gold price. They often move more sharply than the metal itself.

5. Gold funds

Many actively managed gold funds hold mining shares rather than physical gold, and often charge more than a low-cost ETC. Check exactly what the fund holds.

Physical gold or a gold ETC in an ISA

The overall ISA allowance stays at £20,000 after 6 April 2027. The change from that date only affects Cash ISAs for people under 65 (a £12,000 limit), not Stocks and Shares ISAs.

Can I hold gold in a SIPP?

Some SIPPs allow gold ETCs or mining shares. Some SIPPs and SSASs also allow investment-grade gold bullion (995+ purity), but not coins. Not every provider offers it, so check their list of permitted investments. Pension contributions get tax relief, but the money is locked away until you reach the minimum pension age.

Self-employed or run a limited company? Buying gold through your company changes the tax treatment: Corporation Tax applies instead of CGT, and the coin exemption works differently. Speak to an accountant before you do it.

How much gold makes sense in a portfolio?

There’s no single percentage that suits everyone. Gold pays no dividends or interest, and any return comes only from price changes, which can go down as well as up. Some investors hold it for diversification or as a hedge against certain economic risks, but that isn’t guaranteed either. Before you decide, think about what role you expect it to play, how much you already hold in shares, bonds and cash, and whether you’re comfortable with sharp swings. More gold means less money in assets that produce income.

Practical tips before you buy

• Compare the total cost, not just the price: premium, delivery, storage and buy-back price.
• Storing at home: a safe fixed to the floor or wall, and a check that your home insurance covers precious metals and up to what amount.
• Vault storage: most large dealers offer it for an annual fee. Compare it with an ETC’s fee.
• Keep your invoices: even with CGT-free coins, your bank may ask for proof of where the money came from when you sell and transfer a large sum.

If you travel with gold or move abroad

Under EU rules, gold coins (90%+ purity) and gold bars (99.5%+) count as cash. If you enter or leave the EU carrying gold worth €10,000 or more, you must declare it to customs. Check the UK rules before you travel too.

The CGT exemption for Sovereigns and Britannias applies while you’re UK tax resident. If you move abroad, gains on a sale are taxed under the rules of your new country, so check them before you sell.

Key points

• Investment gold is free of VAT, silver usually carries 20%.
• Gold and silver Sovereigns and Britannias are free of CGT while you live in the UK.
• Bars, foreign coins and DigiGold are subject to CGT: 18% or 24% on gains above £3,000 for 2026/27.
• A gold ETC in a Stocks and Shares ISA has no VAT and no tax on gains, but check the fees.
• With silver, work out how far the price has to rise just to cover the VAT and the spread.
• Keep the invoice for every purchase.
• If you move abroad, the tax rules change. Check them before you sell.

Sources

• GOV.UK – Capital Gains Tax: rates and allowances
• GOV.UK – Investment gold coins (VAT Notice 701/21A)
• GOV.UK – ISA changes from April 2027
• The Royal Mint – DigiGold FAQ (fees and CGT)

Want to compare shares on clear criteria instead of gut feel? Try the ShireQuid Stock Scorer and rate companies, gold miners included, on the same model.

Disclaimer: This article is for education only and is not financial advice. ShireQuid is not authorised by the Financial Conduct Authority. When you invest, your capital is at risk. Tax rules depend on your individual circumstances and may change. If you are unsure, speak to a regulated financial adviser.