Buying Gold Bullion in the UK

Sam

— 2 min read
how to buy gold bullion in the uk

There are four main ways to own gold in the UK. You can buy:

  1. Bullion to hold at home
  2. Vaulted bullion
  3. An exchange traded fund

All gold in the UK is VAT free for non VAT registered private individuals.

Bullion to hold at home

There are two types of bullion you can hold:

  • UK currency
  • Other

UK currency covers sovereigns and Britanias. The Brittania is a one ounce gold coin, the Sovereign is a 0.2354 troy ounce coin. They are both legally classed as currency in the UK, which means there is no capital gains tax to pay on them, and no VAT. Very nice!

Other covers all other forms of holding gold, which is either:

  • Bars
  • Foreign coins

All of which incur UK capital gains tax.

Vaulted Bullion

You can buy bullion and pay to have it stored in a secure vault. This usually incurs a fee for storing the gold. In general there are two types of vaults:

  • Allocated
  • Unallocated

Allocated bullion means that when you buy one ounce of gold, there is a specific one ounce of gold in the vault that is yours.

Unallocated bullion means that when you buy an ounce of gold, you can sell or withdraw it, but that vault will give you an ounce - there is not a specific piece of metal in that vault that you own. The metal is in a pool, and you can withdraw/sell an amount from the pool.

This matters if the vault goes bankrupt. In that case, with an allocated vault your gold is your gold, regardless of the financial situation of the vault. With an unallocated vault, the creditors will be paid first and you might get to withdraw some gold if your lucky.

Allocated is always safer.

Exchange Traded Funds (ETF)

With an ETF you can buy a share of the fund, and the fund invests as it wants. There are funds that hold gold, and an ETF gives a simple and easy way to invest in gold.

With an ETF you will never own a physical amount of gold, the gold is always held by the fund.

If you use an ETF, you can hold this within an ISA.

The difference with silver

Silver is lower value than gold, and in the UK you pay capital gains tax and VAT.

Buy bullion to hold at home. Spend over £250 and get a free 1 ounce silver coin with this link: Bullionbypost

If the link doesn't work, enter MPEK PTLG at checkout.

The cheapest way to get into gold is their "Best value gold sovereign" option. It gives you a sovereign from their bucket of sovereigns.

Buy vaulted bullion: The easiest way is with BullionVault

The Royal Mint runs an ETF that also allows you to withdraw bars from their vault in Wales: https://hanetf.com/fund/rmau-physical-gold-etc/

Hargreaves Lansdown offer good value ISAs: www.hl.co.uk

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