Shifting CGT Landscape: Are You Prepared?

What is Capital Gains Tax (CGT)?

Capital Gains Tax is the tax applied on the profit when you sell, give away, or dispose of any assets you own that has increased in value. These assets can include shares, bullion, and real estate property. CGT is payable only on the gain, not the total amount of money that is received from the sale.

Are rates and exemptions for Capital Gains Tax changing?

There is wide speculation that the government may increase the rate of Capital Gains Tax in the upcoming October Budget. The current rate of Capital Gains Tax varies from 10% to 20% (the exact rate can be found on the HM Revenue & Customs website). However, there are concerns that the rate could increase to levels aligning with the higher rate of income tax, possibly up to 45%, together with the potential to remove the current annual exemption.

Currently, the annual exemption amount for CGT in the 2024-25 tax year is set at £3,000. This is the total amount of profit you are able to make from the sale of your assets in this financial year before any tax is payable. However, it is widely believed that the government may slash this exemption amount—or even remove the exemption completely—in the upcoming Budget in October, possibly effective immediately after the announcement. This change could result in CGT being payable on all profits from gold and silver, potentially having a large impact on your financial plans.

How can you prepare for this possible change in CGT?

An effective way to protect your precious metal holdings from these potential future CGT hikes is to consider the tax status of the coins and bars that you own. Currently, coins produced by The Royal Mint that qualify as British legal tender are completely exempt from Capital Gains Tax. These include all silver and gold Britannia coins, post-1837 gold sovereign coins, Queen's Beasts and Tudor Beasts coins, and UK Myths and Legends coins. You can make unlimited tax-free profit of any value on these coins. Any profits made from all other gold and silver coins and bars that are not in this category are taxable.

For example, imagine you own a portfolio that includes a mix of gold bars, South African gold Krugerrand coins, and UK Royal Mint gold Britannia coins. If the CGT exemption is eliminated or reduced, the profits from selling your gold bars and Krugerrand coins would be subject to taxation. Also, if the tax rate rises, the amount of tax you would pay on the profits from selling your gold bars and Krugerrands could also rise significantly. However, any profits made from your gold Britannia coins would remain entirely tax-free.

Is it time to reevaluate your portfolio and switch to more tax-efficient options?

Make the smart switch

Why not consider part exchanging your non-CGT-free coins and bars for CGT-free alternatives? This process involves selling your non-CGT-free gold and silver items and using the funds to purchase CGT-free coins such as Gold Britannias, Silver Britannias, or Gold Sovereigns. At Atkinsons Bullion, we offer an exclusive part-exchange service that allows you to do just that. Plus, when you swap your non-CGT-free items for CGT-free coins, we will give you up to an additional 1% over our website's selling price on selected items. This means you could enhance the tax efficiency of your portfolio while also maximising the value.

Get in touch

Don’t wait until the Budget changes are announced—why not prepare your portfolio now? Contact us by calling 0121 355 0620 or emailing our team at info@atkinsonsbullion.com to learn more about our part-exchange service and how you can optimise your assets for a potentially shifting CGT landscape.

Please note: Any part exchange will be treated as selling items to us and buying items with the generated funds from the sale. It is your own responsibility to be aware of any personal tax liability that arises from the sale. Please ensure you seek independent professional advice to support your decision.