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Scrap Gold Blog

Scrap Gold Laws And Regulations In The UK: What You Need To Know

Published Thursday 27th April 2023

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Understanding the tax laws and regulatory requirements related to selling gold in the UK is essential for compliance and avoiding legal issues. This post explains how to minimise tax liability when selling gold and protect your capital.

UK Tax Laws Related To Selling Gold As An Individual

If you sell gold as an individual in the UK, you may be liable to pay tax on your profits. Taxes include:

  • Capital gains tax on gold sales: The current annual exempt amount for capital gains tax is £6000, which means you can make that much profit selling assets without paying any tax. However, if your profits exceed this amount, you will pay tax at 10% or 20%, depending on your income tax band. UK gold coins such as the Sovereign and Britannia are regarded as legal tender and are therefore exempt from any Capital Gains Tax on profits when sold.

Understanding the tax implications of selling gold is essential. If you fail to comply, you could face fines and have to pay interest payments on the outstanding taxes. HMRC may also seek to take you to court if you avoid paying a large sum of taxes for a long period. They may also prosecute if they discover you failed to follow statutory regulatory requirements (such as gold sales record-keeping, as discussed below).

Legal Requirements For Individuals Selling Gold

If you sell gold in the UK, you must keep transaction records, such as receipts and invoices.

Resources For Those Selling Gold

If you’re selling your own gold in the UK and want to learn more, resources are available to help you comply with tax laws and regulations.

  • Gov.UK website. This official site explains whether you must pay tax on gold you sell.
  • Gold dealers and refineries. These provide additional information on the tax implications of selling gold and any regulatory requirements you must follow.
  • Tax advisors. Citizens Advice and private tax advisors can tell you if you need to pay tax on gold sales and how much you owe.

Different Types Of Gold You Can Sell

Different Types Of Gold You Can Sell

There are numerous types of gold you can sell to make money. These include:

  • Gold jewellery, such as gold rings and gold necklaces
  • Gold bullion, such as coins and bars
  • Gold nuggets

How To Determine Capital Gains Liability On Gold Sales

Using a simple two-step process, you can determine your capital gains liability on gold sales.

  • Calculate the difference between the price you sold the gold and the price you bought it. (It should be positive if you made a profit).
  • Subtract the capital gains allowance discussed above and apply a 10 or 20% tax on the remainder, based on your income tax bracket. (Account for other capital gains earned during the current tax year).

Minimising tax liability when selling gold is essential, so always speak to your accountant before making a significant sale.

What Are The Risks And Challenges Associated With Selling Gold

The risks and challenges associated with selling gold as an individual are substantial and include:

  • Market volatility – you may sell at the wrong time, just before prices rise
  • Fraud – you may sell to illegitimate dealers who don’t pay you what your gold is worth (or nothing at all)

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