When Does Buying Gold Become Reportable?

If you’re buying gold in the UK, you might be wondering whether you have any reporting requirements. In this article, we share what to know about buying investment gold in the UK, including when dealers need to report gold purchases, what types of identification are needed for large transactions, and what to know about gold and VAT, CGT, and Inheritance Tax.

Definition of investment-grade gold in the UK

Knowing how investment-grade gold is defined can help you understand what types of gold are VAT-exempt and subject to record-keeping rules.

Under HMRC’s VAT Notice 701/21A, investment gold in the UK includes:

• Gold bars or wafers of at least 995 parts per thousand purity, in weights commonly traded on bullion markets
• Gold coins minted after 1800 that are:
  • Of a purity of at least 900 parts per thousand
  • Legal tender in their country of origin (or once were)
  • Normally sold at a price not exceeding 180% of the gold’s open market value.

Coins that meet this criteria, like Gold Britannias or Gold Sovereigns, are considered investment gold. HMRC also maintains a list of approved investment gold coins, which is updated annually and includes many popular Royal Mint and international gold bullion coins.

Coins that don’t meet the above standards, like collector or numismatic pieces that sell for much higher than their gold content, are treated as non-investment gold.

See: The British Gold Sovereign - All You Need to Know

Do you need to report gold bullion in the UK?

You do not need to report gold bullion in the UK. It is completely legal to own gold, and unlike other financial assets that must be registered or declared to authorities, holding gold bullion bars or coins doesn’t come with any reporting obligations. This means you’re free to buy and store physical gold without notifying any government body or regulatory authority.

This freedom is one of the most appealing features of gold – it exists outside the banking system and allows investors to build their wealth privately. It also means you don’t have to worry about any unnecessary paperwork, making investment more simple.

However, while owning gold bullion doesn’t come with any reporting obligations, it can be different when you’re buying or selling gold. In these situations, there are certain anti-money laundering (AML) regulations that dealers must follow, especially when it comes to large transactions. These rules don’t affect how much gold you can buy, but they can require you to provide identification for compliance purposes.

When dealers need to report gold purchases in the UK

Even though buying gold is completely legal in the UK, and in most cases private, there are still situations where a bullion dealer might have to verify your identity and report gold purchases to HMRC.

Under UK law, gold dealers are legally required to record customer details for specific transactions. These rules are set by HM Customs & Excise and fall under both Anti-Money Laundering (AML) and Know Your Customer (KYC) regulations.

Dealers will need collect identification when:

• A customer’s first purchase exceeds £5,000, or
• The total value of purchases within a 12-month period exceeds £10,000.

In both these cases, dealers are obliged to report the transaction to HM Customs & Excise and maintain full identification records for compliance purposes. In some cases, smaller purchases might also trigger ID checks if a dealer suspects that multiple smaller transactions are being made to avoid the threshold.

What types of ID are needed?

To comply with KYC regulations, dealers must verify a buyer’s identity and address via:

• A valid passport or UK driver’s licence
• A recent utility bill or bank statement (to confirm address)
• For company purchases, business registration documents and ID for the authorised representative.

Dealers are required to store customer records for at least five years. The information is not shared publicly or used for market, and is only disclosed to HMRC or law enforcement if formally requested.

Learn More: How Much Gold Can You Own?

Do you need to pay VAT on gold in the UK?

Investment-grade gold has been exempt from value added tax (VAT) in the UK since the year 2000. This exemption was introduced to bring the UK in line with other European countries and helps ensure gold is treated as a financial investment rather than an ordinary consumer good.

What is value added tax (VAT)?

VAT is a consumption tax that’s applied to most goods and services sold in the UK, typically at a standard rate of 20% though some items qualify for reduced rates of 5% or 0%. Before 1 January 2000, gold was subject to the standard VAT rate, which made investing in bullion more expensive for UK buyers.

Today, however, investment-grade gold (as defined by HMRC’s VAT Notice 701/21A outlined above) is completely VAT free, which means private investors don’t pay VAT when buying qualifying gold bars or coins.

Which gold is VAT-exempt in the UK?

VAT-exempt gold in the UK includes:

• Gold bars or wafers with a purity of at least 99.5%
• Gold coins minted after 1800, with a purity of at least 90%, that are or have been legal tender in their country of origin and normally trade at no more than 180% of their gold value (i.e. the spot price of gold).

When do you need to pay VAT on gold?

The VAT exemption only applies to investment-grade gold, which means you still need to pay VAT on:

• Gold jewellery and accessories, regardless of purity
• Collector or numismatic coins sold mainly for their rarity or design (as opposed to gold content)
• Decorative or antique gold objects that don’t qualify as investment gold.

For example, a 22-carat gold necklace would attract 20% VAT while a 1 oz Gold Britannia coin would not.

Gold and Capital Gains Tax (CGT) in the UK

Although gold is VAT exempt in the UK, you might still be liable for Capital Gains Tax (CGT) when you sell gold at a profit. Note that CGT applies only to the gain made on a taxable asset when it’s sold, not on the total sale amount.

What is Capital Gains Tax (CGT)?

CGT is a tax charged on the profit you make when selling an asset like gold, shares, or property. For example, if you buy a gold bar for £8,000 and sell it for £10,000, you’ll have to pay CGT on the £2,000 profit.

For the 2024/2025 tax year, every individual has an annual CGT allowance of £3,000, which means you don’t need to pay CGT if your total gains tax from all taxable assets fall below that amount. If your gains are above £3,000, they’ll be taxed at 10% or 20% depending on your income tax band.

Do you need to pay CGT on gold?

Not all gold is subject to CGT in the UK. All Royal Mint bullion coins, including Gold Sovereigns and Gold Britannias, are exempt from CGT because they’re classed as UK legal tender. This means you can sell these coins for any profit without paying tax.

Other forms of gold, however, like bullion bars or foreign coins like Gold Krugerrands or Gold Maple Leafs, are subject to CGT when sold for a profit above the annual allowance of £3,000.

What to know about CGT on gold in the UK

If you sell taxable gold, like bars or non-UK coins, you need to keep clear records of your transactions, including:

• Purchase and sale receipts
• Dates of acquisition and disposal
• Weight, purity, and serial numbers (if applicable).

HMRC will require evidence of your original purchase price to accurately calculate any gains you made upon selling.

Keep Reading: Selling Gold: How to do it right

Gold and Inheritance Tax (IHT) in the UK

Inheritance Tax (IHT), sometimes called estate tax, is a tax charged on the total value of a person’s estate after death. This includes all assets, including property, savings, investments, and physical possessions – including gold bullion.

The standard IHT tax rate in the UK is 40% on the value of an estate above the £325,000 threshold. This threshold can be combined for married couples or civil partners, allowing a total of £650,000 before any tax is due.

Is gold subject to Inheritance Tax?

Yes, gold is considered part of your estate and is therefore subject to Inheritance Tax if the total value of your estate exceeds the above thresholds. Whether you hold gold bars or gold coins, it will be valued at its market price at the date of death and included in your estate’s total calculation.

That said, there are strategic ways to reduce potential liabilities. These include:

• Gifting gold during your lifetime: Gifts made more than seven years before death are usually exempt from IHT
• Holding gold through a pension: Certain pension schemes allow exposure to gold, and pension assets are generally exempt from IHT
• Trust structures: Establishing a trust can help control how your gold assets are managed and distributed, potentially reducing IHT exposure.

When it comes to inheritance planning, it’s always recommended to seek professional financial or tax advice.

Learn More: Is Gold Exempt from Inheritance Tax in the UK?

Does HM Revenue and Customs track gold purchases?

Yes, HMRC does track gold purchases, but only in specific cases. Generally, HMRC doesn’t track every gold purchase, but dealers are legally required to report certain transactions under anti-money laundering (AML) regulations.

This includes any cash purchase exceeding £10,000, or any transaction that appears suspicious. This rule applies to all gold dealers in the UK registered under the Goldsmiths’ Company or with HMRC’s High Value Dealer Scheme.

Summary: Buying gold in the UK

If you’re in the UK, you can hold as much gold as you want, with no obligation to report your holdings to any authority or government body. However, there are certain cases where a bullion dealer may need to verify your identity or report a transaction to HMRC. These include:

• Purchases over £5,000, or total purchases exceeding £10,000 within a 12-month period
• Cash transactions above £10,000.

These checks are part of routine compliance measures and have no restrictions on how much gold you can own.

When it comes to tax, most forms of investment-grade gold are exempt from VAT, and all Royal Mint coins are also free from CGT. However, gold holdings may be subject to Inheritance Tax.

If you’re ready to begin your gold investment journey, or expand your collection, browse our selection of gold bullion bars and coins, including VAT-free Royal Mint products.