Is Gold Exempt from Inheritance Tax in the UK?

Gold has been used to preserve and pass down wealth for generations, whether it’s in the form of heirloom jewellery or bullion bars and coins. But, for some people, it can be confusing to understand how inheritance tax applies to gold.

In this article, we explain the inheritance tax rules that apply to gold in the UK and some strategies to reduce your tax liabilities and make inheritance planning easier.

The tradition and significance of inheriting gold

Gold has been a symbol of wealth and stability for thousands of years, and the tradition of passing down gold exists across generations and cultures. Inheriting gold carries great emotional and cultural significance, both because of the act of inheritance itself and because of the value gold represents.

For many families, inheriting gold isn’t just about passing on material wealth, but about preserving family history and maintaining a connection with the past. Gold items often carry personal stories and a sentimental connection that makes them irreplaceable.

Of course, these days gold also symbolises economic stability and can act as a form of security that helps the recipient preserve their purchasing power over time. Inheriting gold can provide a financial cushion during periods of uncertainty and serve as a way to transfer wealth over generations.

Read: Giving Gold as a Gift

Understanding inheritance tax in the UK

Inheritance tax (IHT) is a tax charged on the value of a person’s estate when they pass away. An estate includes all the assets a person leaves behind, including property, cash, investments, and personal possessions such as gold.

In the UK, there is a standard tax-free threshold known as the nil-rate band, which is currently set at £325,000. This means that no inheritance tax needs to be paid if the total value of a person’s estate falls below that amount. Anything valued above the threshold may be taxed at a rate of 40%, although certain tax exemptions can apply:

• Spouses and civil partners: If the estate is passed on to a surviving spouse or civil partner, no inheritance tax is due, regardless of the estate’s total value
• Residence nil-rate band: If a primary residence is passed on to direct descendants (such as children or grandchildren), the threshold may increase to £500,000
• Charitable gifts: Assets left to a registered charity are exempt from inheritance tax.

Do you have to pay inheritance tax on gold in the UK?

If you’re receiving gold as an inheritance, it’s important to understand the tax implications that may be involved.

In the UK, there are no special exemptions for gold when it comes to inheritance tax, whether it’s in the form of coins, bars, or jewellery. This means that if the total value of the deceased’s estate exceeds the current £325,000 threshold (or £500,000 if passing a home to direct descendants), inheritance tax may be due on the entire estate, including any gold and other assets.

That said, if gold is passed to a spouse or civil partner, it’s generally exempt from IHT. The same applies to gold given to a registered charity – it won’t be taxed.

It’s worth noting that HM Revenue & Customs (HMRC) considers gold to be a private asset, which means that, unlike equities, cars, or properties, gold ownership is not required to be formally registered. This means you can pass gold bars and coins to your children without paperwork, even if your estate exceeds the formal threshold.

Gifting gold during your lifetime

Another way to pass on gold is to give it as a gift during your lifetime. HMRC allows you to pass on valuables such as gold without inheritance tax if you live for seven years after giving the gift. If you were to pass away during those seven years, the IHT might still apply, although it could be at a reduced rate under what’s known as the Taper Relief scheme.

Taper Relief essentially reduces the amount of tax owed over the seven years depending on how much time is passed. The table below outlines the tax rates:

YEARS BETWEEN GIFT AND DEATH	TAX RATE APPLIED TO GIFT
3 to 4 years	32%
4 to 5 years	24%
5 to 6 years	16%
6 to 7 years	8%
7+ years	0%

If you’re planning to give gold as a gift, it’s important to note that each person has an annual gift allowance of £3,000 which can be used to gift gold tax-free (or £6,000 in a two-year period). Larger gifts (like gold coins for a child’s wedding or birthday) might also qualify under other exemptions.

Like other tangible assets, if you inherit gold and plan to sell it at a later date, you might be liable for Capital Gains Tax (CGT) on any profit made between the date of inheritance and the sale. That said, certain coins – such as Gold Britannia and Gold Sovereigns – are exempt from CGT because they’re classed as British legal currency. Each person also has a certain annual tax-free allowance for CGT, which is currently set at £3,000.

Keep Reading: The Britannia Coin - All You Need to Know

Things to consider if you’re a beneficiary

If you’re inheriting gold, you may be wondering whether to keep it or sell it. Here are some things to consider to help you decide:

Personal financial goals

Start by reviewing how inherited gold fits into your overall financial strategy. If your goal is to focus on long-term wealth preservation or hedge against inflation, it might make sense to hold onto the gold. If your priority is liquidity or short-term financial needs, then it may be more appropriate to sell the gold investment or reinvest the proceeds.

Storage and security

Gold is a high-value asset and careful attention should be given to storage. If you’re in possession of investment gold bullion coins or bars, you may want to consider a secure storage solution such as a safety deposit box or even a specialist vaulting service. The same can apply to jewellery if you don’t plan to wear it on a regular basis.

See: What is the Proper Way to Store Gold?

Tax and reporting

Understanding the tax implications of your inheritance is essential. Gold may not be taxed if the estate doesn’t exceed the threshold, but any future gains made from selling gold bars or coins might be subject to capital gains tax (CGT). It’s important to understand these rules and how they might apply to your situation. Remember, UK legal tender coins like Gold Britannias and Gold Sovereigns are CGT-free, which might play a role in whether you decide to sell or hold.

Professional advice

If you’re still not sure what to do or how the rules apply to you, it might be helpful to consult with a financial advisor or tax professional. They can help you understand the best way to manage your inherited gold based on your personal situation and financial objectives.

Strategies for reducing inheritance tax from gold

Even though gold isn’t exempt from inheritance tax, there are certain strategies that can help protect more of your estate from inheritance tax liabilities.

Gifting precious metals

One of the most effective ways to reduce the size of your taxable estate is to gift gold or silver during your lifetime.

Each person can gift up to £3,000 per year of gold, free of IHT. If unused, the allowance can be carried forward one year, allowing you to give £6,000 in a single two-year period. Smaller gifts of up to £250 per person, and larger gifts for weddings or civil ceremonies may also qualify as exempt. Remember, if you survive for seven years after making a larger fit, it’s no longer considered part of your estate for inheritance tax purposes.

If tax efficiency is your priority, one of the most tax-efficient ways to gift gold in the UK is to gift legal tender coins from the Royal Mint, like Gold and Silver Britannia coins or Gold Sovereigns. These gold and silver coins are free from value added tax (VAT) and exempt from CGT when sold, which means UK residents can sell them for an unlimited tax-free profit. This makes them ideal for inheritance tax planning.

If you gift non-legal tender coins and your heirs choose to sell them in the future, CGT may apply to any increase in value from the time of inheritance to the time of sale.

Read More: Giving Silver as a Gift

Keep accurate records

If you’re giving any gold as a gift, it’s essential to maintain clear records. Log the recipient, date, value, and description of each gift, and be sure to retain invoices, certificates, and any manufacturer documentation to confirm the item’s authenticity and provenance.

These records will be helpful for your executor and for HMRC, helping make sure tax rules are properly applied while also avoiding disputes.

Prepare a clear will

You can also include gold assets in your will. To do that, specify how you would like the gold to be divided amongst beneficiaries. Consider adding a Letter of Wishes to explain the reasoning behind your decisions. This isn’t legally binding but it can help reduce disagreements or misunderstandings.

If you don’t have a valid will, your estate will be distributed according to UK intestacy laws. This essentially means your estate will go to your spouse if they are still alive or be divided equally amongst your children. If you don't have a spouse or children, the courts will pass your estate on to your next of kin. These situations can sometimes lead to delays and family disputes, especially if the estate contains high-value items like gold.

Buy gold and silver bullion coins and bars

Whether your goal is to preserve your wealth for future generations or simply invest in the enduring value of precious metals, you’re in the right place.

At StoneX Bullion, we stock a vast collection of high-quality gold and silver bars and coins, including CGT-free Silver Britannia coins and gold bullion bars from the world’s most prestigious mints. Browse our range now and start growing your wealth today.

Please note that this article is for general information purposes only and shouldn’t be considered financial or tax advice. We recommend consulting a qualified financial advisor or tax professional for specific guidance tailored to your personal situation.