Britannias, sovereigns and CGT

[Xeros]

I'm sure there has been plenty of people on here have asked similar questions but here I am, probably asking it for the 1000th time

I'm aware sovereigns and britannias are CGT exempt however I've made many cash purchases, swapping non cgt coins/bars for sovereigns and britannias and I'm wondering if I was to ever sell up to buy for example, a property, how exactly does the process work?

Is it as simple as just going to a bullion dealer and selling the sovereigns/britannias and no questions asked or is there still a process of reporting it to hmrc with price you paid, price you sold etc

As I swap/exchange a lot of my bullion would they ask for receipts or how the sovereigns/britannias became in my possession? 

I do half receipts for probably about half of my cgt exempt coins but the other half I don't, is it ever going to be an issue down the line?

Thanks 

 

Edited January 10 by Xeros

[LawrenceChard]

8 hours ago, Xeros said:

I'm sure there has been plenty of people on here have asked similar questions but here I am, probably asking it for the 1000th time

I'm aware sovereigns and britannias are CGT exempt however I've made many cash purchases, swapping non cgt coins/bars for sovereigns and britannias and I'm wondering if I was to ever sell up to buy for example, a property, how exactly does the process work?

Is it as simple as just going to a bullion dealer and selling the sovereigns/britannias and no questions asked or is there still a process of reporting it to hmrc with price you paid, price you sold etc

As I swap/exchange a lot of my bullion would they ask for receipts or how the sovereigns/britannias became in my possession? 

I do half receipts for probably about half of my cgt exempt coins but the other half I don't, is it ever going to be an issue down the line?

Thanks 

 

You are probably best to ask an accountant, although you could try asking HMRC.

Most dealers would create documentation, which should help to support your case, although if HMRC wanted details, it might be better if you also had records of your purchases, trades, etc.

😎

 

[Xeros]

54 minutes ago, LawrenceChard said:

You are probably best to ask an accountant, although you could try asking HMRC.

Most dealers would create documentation, which should help to support your case, although if HMRC wanted details, it might be better if you also had records of your purchases, trades, etc.

😎

 

Thanks for your input I will ask my accountant 

So for example if selling to chards they would provide a receipt of what the coins/are then I'm assuming that's just used as evidence of why the money went into the bank if there was ever questions of a large deposit from hmrc then I suppose letting my accountant know when doing my tax returns the situation of that deposit would be the best way?

I think before I was on TSF I was much more organised with records and where everything was, price i paid and where it came from. Ever since I started trading the things I didn't like as much in my collection and exchanging for things I do like it has complicated a lot of my record keeping

 

[Cornishfarmer]

I wouldn’t put too much effort in to it as one swipe of the pen in the budget could remove the CGT allowance on UK gold/silver.   Another way of getting more tax.   They are going to have to think of more ways of bleeding the U.K. dry to keep up with their spending.    Only good thing is this could kill labour off for 50 years if they carry on like they are

[dicker]

13 hours ago, Cornishfarmer said:

I wouldn’t put too much effort in to it as one swipe of the pen in the budget could remove the CGT allowance on UK gold/silver.   Another way of getting more tax.   They are going to have to think of more ways of bleeding the U.K. dry to keep up with their spending.    Only good thing is this could kill labour off for 50 years if they carry on like they are

I am in agreement with you. Others here have challenged my view that altering CGT status on gold would be easy on the basis that it is currency.  I take a different view - it is simply a tax treatment and is easy to do in legislation.

However, if I were a government and looking for financial “juice” there are many other things I would go after first.

[SovWhat1819]

Proof of sale is certainly a must. As you must satisfy your mortgage adviser, solicitor, and bank of the proof of funds if buying a property. They would at a minimum ask for the proof of sale. Proof of purchase would also be desirable in case they ask but it may not be necessarily essential. If purchase receipts couldn't be provided for all then a legitimate explanation for the rest of them can be made in a statement. If you can also prove longevity it may also help with anti money laundering checks. 

With regards to swaps, I think HMRC could argue there is no such thing, because they would count it as 2 concurrent transactions, therefore the sale part of the swap of non CGT exempt gold would arise a gain in CGT. 

If you haven't already been doing so, you should plan to use your CGT allowance each year to lock in the profits at your allowance limits, rather than disposing all in one go. This can be done through for example selling to a family member at market rate, then buying back later on at the market rate.

Of course all of this should be checked with an expert first

 

[mintmark]

Yes... for CGT they don't talk about sale they talk about disposal, and that includes giving it away.

But from the original post it sounds like that has already happened for the non CGT exempt items.

[Ash1984]

Receipts and invoices, always worth keeping them. I had a run in with the HMRC before I was 18, for the next 27 years I paid the price having to do a tax return. All bar 2 years of that I was employed by the government with a single salary, but still had complete a tax return.

Here's a simple tip, once HMRC see you keep records they tend to leave you alone, it's really worth the effort.

[Bratnia]

On 11/01/2025 at 20:11, dicker said:

I am in agreement with you. Others here have challenged my view that altering CGT status on gold would be easy on the basis that it is currency.  I take a different view - it is simply a tax treatment and is easy to do in legislation.

However, if I were a government and looking for financial “juice” there are many other things I would go after first.

That would upset the Crown. Legal tender coins/notes are the crowns, unlawful to destroy ..etc. Produced by the Royal Mint. If Parliament started applying CGT to such a Royal asset - what next? Pay Council Tax on Royal Estates?

Furthermore the Swiss apply no taxation, and there's a big UK/Swiss 'industry' (in some months when in the EU the UK's largest recorded import/export trade was in gold), misalignment (UK applying taxes) would see a mass exodus/decline in the amount and trust in the UK's gold market, would lose far more than the taxes would raise.

But that doesn't account for stupidity that some governments excel in. Or the oddity of Silver Britannia legal tender coins having taxes applied. I suspect if/when that is reviewed its likely a case of gold being brought into alignment with silver than silver having VAT dropped, even though applying VAT causes the UK more economic harm than good.

[notwell]

On 11/01/2025 at 06:12, Cornishfarmer said:

I wouldn’t put too much effort in to it as one swipe of the pen in the budget could remove the CGT allowance on UK gold/silver.   Another way of getting more tax.   They are going to have to think of more ways of bleeding the U.K. dry to keep up with their spending.    Only good thing is this could kill labour off for 50 years if they carry on like they are

They can't just levy CGT on coins of the Realm thankfully. They dont have the authority just like Jackie Weaver didnt in 2020 lol

 

[mintmark]

Well, it would require a change to the act... this bit (21 1 b). But they can do that... they amend laws all the time.
https://www.legislation.gov.uk/ukpga/1992/12/section/21

Or they could remove the legal tender status of the coins, so that they are not sterling currency any more. I mean, we've already seen banks told not accept commemorative coins for deposit, so it's not like these coins circulate in any practical way.

But if that happened and the coins were no longer currency (i.e. as though they had been demonetised), then they would be chattels for CGT, and subject to an exemption per coin (or set of coins).