The Royal Mint has seen the number of people rushing to buy gold coins doubling on last year in a way to protect their wealth. Gold has seen a surge in the global price in the past year as a way of protecting wealth at a time of economic turmoil linked to the crisis in the Middle East and Russia’s invasion of Ukraine.
And demand for gold coins has been further fuelled by speculation that the Chancellor Rachel Reeves is set to increase Capital Gains Tax on the profits made on the sale of assets, such as shares and property. Ministers are under pressure to raise CGT from the current typical figure of 20 percent to bring it into to line with income tax, which is either 40 percent or 45 percent for high earners.
Any such shift means it would be far less attractive to own shares and property, while it means shifting investments to gold coins, which do not attract CGT on any increase in value, seem a better bet.
As a result, the Royal Mint is reporting that sales of gold coins rose by 118 percent between July and September. Its research also found that 44 percent of UK investors are considering investing in CGT-exempt bullion coins to boost wealth and reduce their tax bill.
The Mint said more people are seeking to exploit the tax-efficient status of gold coins. CGT is levied on gold and silver when it is sold in the form of a small bar, but not on bullion coins issued by the Mint.
Between July and September, revenues from sales of silver and gold increased by 42 percent and 118 percent respectively, compared with the same period last year. However, sales of bullion bars – which are subject to CGT – fell by 11 percent year-on-year.
Stuart O’Reilly, of the Royal Mint, said: “Gold prices have had multiple tailwinds in recent months. We have seen interest rates start to reverse course both sides of the Atlantic. Economic uncertainty and heightened geopolitical risk is leading to competition for safe haven assets. This is driving broadly positive market sentiment, fuelling both demand for precious metals, and activity from those looking to realise capital gains.
“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.
He added: “With the UK budget approaching and uncertainty surrounding the US election, we may see further shifts in investor behaviour.”
“Our data suggests investors are increasingly keen to protect their future investment gains, favouring capital gains tax-exempt investments such as bullion coins over products that are subject to capital gains tax.”
