Understanding VAT and Investment Gold in the UK

Value Added Tax (VAT) regulations significantly impact the purchase and sale of precious metals in the UK. Investment gold, including gold bars and coins, is exempt from VAT in the UK and the European Union since 2000.

This change was initiated by a European Union decision in 1999 to abolish VAT on investment gold. Before this, some countries offered minimal VAT rates on precious metals to encourage domestic purchases, creating disparities in the market. The EU decided to eliminate VAT on investment gold to establish a level playing field across member nations.

The UK Government website provides clear guidelines for what qualifies as "investment gold" for VAT purposes. Investment gold includes

• Gold bars and wafers with a purity not less than 995 thousandths,
• Gold coins minted after 1800 that meet specific criteria
• And a description of a coin sold at a price not exceeding 180% of the open market value of the gold contained in the coin.

The VAT exemption for investment gold in the UK and the EU is a significant benefit for those looking to invest in precious metals, promoting consistency in the market and aligning with a historical precedent of VAT exemption for gold in the UK.

However, it is essential for investors to be aware of the specific criteria that define "investment gold" to ensure they benefit from this VAT exemption.