When purchasing gold bullion, investors should be aware of the potential tax benefits they can enjoy by buying and selling particular items in the UK. One of these benefits relates to Capital Gains Tax (CGT), which applies to the majority of goods bought and sold on for a profit, including most bullion items. If you buy gold or silver bars and sell them on at a higher price than you paid for them, you will pay Capital Gains Tax on that profit.
However, there are some gold bullion items that are exempt from Capital Gains Tax, which is where investors can enjoy the benefits of investing in bullion. In the UK, any item that counts as legal tender is exempt from Capital Gains Tax, including Britannia coins and sovereign bullion coins. Purchasing these coins and selling them on at a profit will allow investors to maximise their returns in the UK market. For these reasons, investors should check the Capital Gains Tax status of the bullion they are intending to buy.
As well as Capital Gains Tax, there are other ways that bullion investors can enjoy tax benefits on their investments. Gold bullion purchased in the UK is VAT free, so investors do not run into additional charges like they might with other investment ventures. Although silver is not VAT free, some suppliers do absorb the VAT cost or include it in their prices, which often makes for a better deal for investors. As the bullion market is becoming increasingly competitive, with many more first time investors dipping into gold and silver, more and more suppliers are likely to reduce or remove additional charges by lowering the price of their bullion
Pension investors can enjoy additional benefits, as HMRC recognises a select range of private investment vehicles that qualify for tax breaks. When income is turned into pensionable assets, such as gold bullion, tax relief is offered in order to provide investors with more retirement income. Including bullion in a pension portfolio can therefore be incredibly beneficial later in life, allowing investors to keep more of their money and avoid heavy taxation. Now that all UK pension holders have much more control over where their money goes, many are choosing to manage it through a range of investment opportunities, including the traditional safe haven of gold bullion.