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Capital Gains Tax – All you need to know when buying gold & silver

It’s a not so well kept secret that certain gold and silver coins are not taxable for Capital Gains Tax. That detail can have a huge impact on your profits.

So we thought we’d provide a run down of what you need to know.

What is Capital Gains Tax?

Capital Gains Tax (CGT) is a tax levied on individuals and corporations when they sell/dispose of an asset and make a profit (a capital gain). For you and I, that means a tax on any profit you make from selling a chargeable asset such as shares or a second home. The tax only applies once the particular asset is sold and a profit has been made, rather than when the asset is still held.

The tax is calculated annually on an individual’s net gains. So for instance, if you sell 2 different shares during the year and one makes a loss while the other profits, your annual capital gain will be the net profit of the two.

The current rate of Capital Gains paid, varies between 18% and 28%, depending on whether you’re a lower or higher rate taxpayer. But don’t be surprised if the UK Government decides to increase the tax as high as 40-45% in the near future, in an attempt to raise taxes stealthily.


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Are there any exemptions?

While most investments will be taxable, the good news is that there are a few exceptions to the rule. Any gains made on an ISA or pension are protected from CGT. Additionally, selling premium bonds, UK gilts, your primary residence, or a private car are all tax-free. Oh, and betting, the lottery and pools also escape incurring CGT.

Is there CGT on gold and silver

Just like any other capital asset, selling gold or silver at a profit can incur CGT. However, we just hate the idea of our customers having to share any profits from gold or silver, if they don’t have to.

Two of the most popular ways of avoiding CGT are by buying UK tax-free coins and Pension Gold.

Coins produced by the Royal Mint, which qualify as legal tender, are not subject to CGT as the Treasury cannot tax the movement of legal currency. This covers Gold Sovereigns, Gold Britannias, Silver Britannias and some other limited issue Royal Mint coins. There is no upper limit either, which is why so many customers focus on these coins as a tax-free store of wealth.

2022 Gold Sovereign
Royal Mint Sovereigns are tax free

Our Pension Gold product has also proved to be a popular way of benefiting from rising gold prices without paying tax. Any profits from gold bullion, held within your Self Invested Personal Pension (SIPP), are sheltered from CGT.

If all this sounds complicated, don’t worry, we specialise in guiding you to the most tax-efficient gold and silver. Just call us on 020 7060 9992 and a member of our team can suggest coins which qualify as CGT-free.

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Can I sell other gold or silver without paying CGT?

Everyone in the UK is allowed to make a profit on sales of £12,300 each tax year without paying CGT. This means if you buy modest amounts of taxable gold or silver, say £5,000; even if the price has doubled when you come to sell, you’ll still fall within your tax-free annual limit.

However, if you also need to sell other taxable assets, such as shares, in the same tax year, you’ll probably wish you owned more tax-free gold or silver.

With this in mind, you could sell small values of your taxable gold or silver so that you fall within your allowance. The annual calculations run from 6 April to the following 5 April, so you could sell some coins before year-end and some just afterwards.

With Covid-related national debt at record levels, we wouldn’t be surprised to see the tax-free allowance reduced or even cancelled altogether.

Summary

The good news is that we focus on selling gold and silver coins which will never be liable for Capital Gains Tax. So if you’re wondering if silver or gold is the tax-free investment you’re looking for, you should look no further than the UK legal tender coins. Both gold and silver versions are very popular, partly due to their tax-free nature, but also because they’re very liquid. So investing in them means they’re easy to sell at optimum prices, without sharing your profits with the Treasury.

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The Forbes Billionaire Index

With the invasion of Ukraine by Vladimir Putin and the crackdown on tech companies in China, there are 87 fewer billionaires in this year’s Forbe’s billionaire list, with 2,688 billionaires making the 36th-annual ranking in total.

Delving into the billionaire list, our research shows not many reports focus on the achievements of millennial billionaires in particular. According to Beresford Research, millennials in 2022 are aged 26-41, where 122 millennial billionaires made the Forbes billionaire list this year.

To understand how millennials have made their fortunes despite being so young in age, we have analysed the latest data from Forbes to assess which industry has the most millennial billionaires.

The industry with the most millennial billionaires

Our research shows technology is the industry with the most millennial billionaires, with 43 in total. The combined net worth of millennial technology billionaires reaches $239.1 billion.

Industry No. of Millennial Billionaires Collective Net Worth of Millennial Billionaires (USD$ billion)
Technology 43 $239.1
Finance and Investments 21 $106.5
Media and Entertainment 11 $85.1
Fashion and Retail 10 $38.1
Real Estate 7 $30.3
Healthcare 6 $7.6
Automotive 4 $10.0
Food and Beverage 4 $18.4
Manufacturing 4 $11.6
Metals and Mining 4 $7.1
Construction and Engineering 1 $1.2
Energy 1 $6.6

The finance and investments industry has the second highest number of millennial billionaires, with 21 in total. This is followed by media and entertainment where the billionaires have a collective net worth of $85.1 billion.

Construction and engineering, and energy each have just one millennial billionaire. Interestingly, these are the two industries with the eldest millionaire billionaires.

The industries with the youngest millennial billionaires

The healthcare, and metals and mining industries have the youngest average age of millennial billionaires, at 34 years old. The millennials in these industries combined have a net worth $14.7 billion.

Industry Average age No. of Millennial Billionaires Collective Net Worth of Millennial Billionaires (USD$ billion)
Healthcare 34 6 $7.6
Metals and Mining 34 4 $7.1
Finance and Investments 36 21 $106.5
Fashion and Retail 36 10 $38.1
Automotive 36 4 $10.0
Manufacturing 36 4 $11.6
Technology 37 43 $239.1
Food and Beverage 37 4 $18.4
Real Estate 38 7 $30.3
Media and Entertainment 39 11 $85.1
Energy 39 1 $6.6
Construction and Engineering 41 1 $1.2

There are two 26 year old millennial billionaires in the Forbes 2022 billionaire list. One is Henrique Dubugras, a billionaire from Brazil who operates in the finance and investment sector, and the second is Katharina Andresen who is located in Norway.

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The 10 richest millennial billionaires in the world

The richest millennial billionaire in the world is Mark Zuckerberg, with a net worth of $67.3 billion. Second to Mark is Zhang Yiming who operates in the media and entertainment industry.

Name Age Industry finalWorth Country of Citizenship
Mark Zuckerberg 37 Technology 67300 United States
Zhang Yiming 38 Media & Entertainment 50000 China
Sam Bankman-Fried 30 Finance & Investments 24000 United States
Guillaume Pousaz 40 Finance & Investments 23000 Switzerland
Yang Huiyan & family 40 Real Estate 18700 China
Lukas Walton 35 Fashion & Retail 16500 United States
Pavel Durov 37 Technology 15100 Russia
Dustin Moskovitz 37 Technology 11500 United States
Brian Chesky 40 Technology 11500 United States
Eduardo Saverin 40 Technology 10600 Brazil

Daniel Fisher, CEO at Physical Gold commented:

“Our research shows there has been a drop in billionaires making the Forbes billionaire list this year, but an increase in the number of millennial billionaires.”
New entrants to the list include Rihanna, who is credited as a ‘self-made’ billionaire, at 34 years old. Rihanna has a net worth of $1.7 billion. Her success is attributed to her cosmetics line Fenty Beauty, her lingerie company Savage x Fenty, and her career as a chart-topping musician and actress.

Mr Fisher continues; “Rihanna is an example of the importance of diversifying your portfolio. This is particularly key against a volatile market since it can reduce losses incurred. For example, investing in commodities which are in high demand during periods of economic turmoil can help investors weather the storm.

“We have seen external factors impact billionaires this year, where the number of Russian billionaires has dropped due to the war. There have also been drops in the number of billionaires from China where there has been a crackdown on technology companies. Despite this, technology remains the industry with the highest number of millionaire billionaires, with 43 making the list this year.”

Methodology for research
The millennial billionaire research was undertaken by Physical Gold through an analysis of the Forbes World’s Billionaire list, to see how many billionaires there were aged 26-41.

The results were tallied for each included industry and were thus ranked by the industries that currently have the most to least number of millennial billionaires.

For millennial billionaires who accumulated their fortune from more than one sector, they were excluded from the research so it could be a fair and definitive assessment for each included industry in the research.