What is "CAPITAL GAINS TAX" and will I have to pay it on precious metals?? More to the point,how NOT to...

CAPITAL GAINS TAX(CGT) is a tax levied in the UK on the profit made on the 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.

For information on the current annual exemption limit, please visit:

• Capital Gains Tax rates and allowances (gov.uk)

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 precious metals, a British or UK resident buyer subject to British taxes would need to have made more profit than the annual exemption limit on the sale of their assets during one year. With prices of PRECIOUS METALS set to sky rocket, maybe having to consider GCT should be on everyone's mind??

Gold, silver & platinum price

Of course, someone could be selling 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, silver & platinum 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 bullion coins in any quantity and over any time period. But since Bullion also comes from other countries, international bullion coins such as the Canadian Maple and the Krugerrand are not classed as legal tender in the UK – they are not CGT exempt, meaning you would have to pay tax on any profit from these...

22ct gold sovereign

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.

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