Britons purchase up gold bullion cash as value hits document excessive

Britons are buying up gold bullion coins instead of gold bars, the Royal Mint says, as prices spike and customers look to avoid rumoured rises to capital gains tax. 

The gold price today breached the $2,700-per-ounce level for the first time, as US election concerns and Middle East tensions boost demand for a safe haven for investments.

The Royal Mint says sales of bullion bars, which are subject to CGT, fell by 11 per cent annually in the quarter to the end of September 2024.

That is likely to be driven by concerns that the chancellor will hike CGT on investment profits to 39 per cent in the Budget on 30 October, up from 10 to 20 per cent now depending on your tax band.

However, the Mint has seen a boom in purchases of gold and silver bullion coins, where CGT is not liable.

Sales of bullion coins from The Royal Mint rose to a record high in the same period, with revenues up 110 per cent compared to the same period of 2023.

The Royal Mint said most of this came from the sale of gold bullion coins.

 Also increasing the interest in gold is the rising price of the precious metal.

Experts expect the gold price to keep rising in the coming months.

Stuart O’Reilly, of the Royal Mint, said: ‘Gold prices have had multiple tailwinds in recent months.

‘Beneath the surface, the type of assets investors prefer is changing. While gold and silver can help investors strengthen and diversify their portfolio, our record quarter for bullion coin sales reflects the renewed focus on tax efficient investing.

‘Our data suggests that investors are increasingly keen to protect their future investment gains, favouring CGT-exempt investments such as bullion coins over products that are subject to CGT.’

 How to invest in gold

There are a few main ways you can get exposure to the precious metal.

One way is to buy physical bars or coins.

These can either stored at home (ideally with sufficient security and insurance cover) or be held in a secure vault, like the Royal Mint’s, for a fee.

Certain gold bullion coin products issued by the Royal Mint have the status of legal tender currencies and are therefore exempt from CGT and VAT.

You can invest in gold itself through Exchange Traded Commodities (ETCs). Tracking the gold price in this way is no different from holding a passive investment in a stock market index.

These are funds, listed on the stock exchange, that provide investors with exposure to the gold price, backed up by physical holdings in bars of gold held in secure vaults.

You can hold ETCs in a Sipp or Isa to protect gains from tax. Investors need to be wary of ETFs that gain exposure through derivatives rather than physically holding the precious metal, as these are complex and can include costs that are not immediately apparent to the naked eye.

Another way that investors can get exposure to gold is through multi-asset funds.

> What is driving the price of gold and how do you invest?