Is Gold Exempt from Inheritance Tax?

Buying and selling gold has never been easier with bullion dealers like Atkinsons making it possible for investors and collectors to buy precious metals either in-store or online.

This easy accessibility, coupled with new record for gold prices being set recently, means that more and more people are looking at bullion as a way of investing.

But this begs the question, what are the tax implications of investing in gold? And, more specifically, is gold exempt from inheritance tax in the UK?

In this guide, we’re going to be looking at the different tax laws you need to be aware of before investing in bullion, particularly if you intend to use it as a way of transferring wealth to your children.

Capital Gains Tax on Gold Bullion

The first piece of legislation that you need to be aware of is Capital Gains Tax (often abbreviated to CGT). This is the tax law that defines how much is owed to HMRC when profiting from the sale of goods.

The term ‘capital gains’ refers to the amount of money made once the original purchase price has been taken into account. For example, if you buy a gold bar for £2,000 and sell it for £3,000 then your capital gains stand at £1,000. This is the taxable amount; not the full £3,000 you receive.

Now, there is a threshold currently in place under which no CGT is applied. For 2023/24, this stands at £6,000. This means that for the first £6,000 you earn per financial year as a result of selling items like bullion, you will not have to pay any CGT. For anything over that threshold, the tax applied stands at 10% if you pay basic income tax and 20% if you pay the higher rate.

Gold Coins & Capital Gains Tax

Although CGT is applicable in the manner outlined above, this only applies to non-legal tender. This means that although CGT applies when selling gold bars, when selling gold coins they may be exempt.

Any gold coins produced by The Royal Mint are considered legal tender. As such, they are exempt from capital gains tax and may be bought and sold freely. This applies no matter the volume or value of sales making it an attractive option to investors.

Inheritance Tax

Inheritance tax is tax paid to HMRC on the value of someone’s estate once they pass. A person’s estate consists of property, money and possessions left behind. There are, however, predefined thresholds in place whereby anything under that value qualifies as being tax-exempt.

There is usually no inheritance tax to pay if:
The value of a person’s estate is valued at less than £325,000 Anything above the £325,000 threshold is left to a spouse, civil partner, charity or amateur sports club If your home is given away to children, the threshold increases to £500,000.

Gold & Inheritance Tax

Buying and investing in gold can be a tax-efficient and practical way of transferring wealth to loved ones, particularly after death. Gold collections are considered private, meaning that unlike equities, cars, or properties there is no legal requirement to register or transfer ownership when gifted. Leaving wealth in the bank erodes value, thanks to low interest rates and rising inflation. With gold, this wealth is transferred to a tangible asset that can be allowed to grow tax-free.

UK residents can benefit from tax exemption on gold coins like Gold Britannias or Gold Sovereigns. As mentioned earlier, they do not qualify for CGT (or VAT for that matter).

Many people thinking about how best to transfer their wealth without incurring stinging HMRC fees often also choose to give gold coins as presents whilst still alive. Giving these as Christmas or birthday gifts allow some wealth to be distributed using the £3,000 annual inheritance gift allowance.

Summary: Is Gold Exempt from Inheritance Tax?

The short answer to this is no, gold is not fully exempt from inheritance tax. However, there are some significant tax benefits to transferring your wealth this way. If you decide to invest in gold coins produced by The Royal Mint, they will be exempt from both capital gains and value-added tax. This means whoever you pass them on to will be able to sell them without incurring any tax costs.

Gold also represents an investment in itself. Whereas transferring existing monetary funds represents a face value, the price of gold can increase over time. This means the value of the inheritance you leave has a good chance of continuing to rise long after you are gone.

Most Popular CGT Free Range

This blog represents one person’s opinion only. Please note, gold and silver prices may go down as well as up. Atkinsons Bullion & Coins accepts no responsibility for any losses based on information we have provided. We do not offer investment advice. Please carry out your own research before making an investment decision.