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Gold, silver and platinum bullion have long been considered safe havens for investors, offering a tangible store of value. However, when it comes to inheritance tax (IHT) in the United Kingdom, these precious metals are not exempt. Understanding why these assets are taxable and how to properly declare them to HM Revenue and Customs (HMRC) is crucial for estate planning and compliance.
Bullion, including gold, silver and platinum, is considered a physical asset, much like property, art or collectables. These assets are included in the total value of an estate and thus are subject to IHT.
The inherent value of these metals makes them a significant part of the estate’s worth. Ignoring their value would create discrepancies in the estate’s total valuation.
HMRC classifies bullion under the broader category of investments and tangible assets, which are all subject to IHT. According to the HMRC guidelines, any asset that forms part of the deceased's estate is potentially liable for IHT.
The regulation ensures fairness and consistency in the taxation process, preventing potential loopholes that could arise from exempting certain valuable assets.
Bullion coins are, however, exempt from Capital Gains Tax (CGT), and gold bullion investment is also exempt from Value-Added Tax (VAT). (Buy UK Gold, Silver & Platinum Coins & Bars | The Royal Mint)
Gifting bullion
Gifting, in the context of finance and investment, is ‘an offering of money or assets made by one person to another in which nothing of comparable value is given, or expected to be given, in return.’ (Gift: Meaning, Tax Considerations, Example (investopedia.com)
Bullion bars and coins make a timeless gift for a loved one, and can also offer an efficient method of wealth transfer in the correct situation:
There are several variations of gifting:
1. Potentially exempt transfer (PET)
This is where a gift is only deemed to have fully left the estate of the donor after seven years, at which point it is no longer tested against the donor’s IHT position.
If the donor dies within seven years, then IHT is payable on a tapered basis, based on number of years since the gift was made (this assumes the donor/estate has already used up all of the IHT allowance).
2. Annual gift allowance
A total of £3,000 per year can be gifted free from IHT (any unused allowance can be carried forward one tax year – up to £6,000). This can be given to an individual or split between persons.
3. Wedding gifts
a. A person can gift their child up to £5,000 BEFORE the wedding takes place
b. A person can gift their grandchild or great grandchild up to £2,500
c. A person can gift another person up to £1,000
4. Gifts from surplus income
If you have enough income to maintain your usual standard of living, you can make gifts from your surplus income.
a. However, you must demonstrate to HMRC that the income was truly ‘surplus’ to your normal spending habits/needs.
b. This means your gift could be quite considerable sums, whilst mitigating your estate’s potential IHT liability, provided the donor lives a moderate lifestyle.
The IHT allowance is £325,000 per spouse (total: £650,000) and any unused allowance by one spouse may be passed to the other on death. In fact, the Residence Nil Rate Band (RNRB) now affords a further £175,000 IHT allowance per spouse, to be used for the transfer of the family home/main residence. This can equate to an effective £1 million IHT allowance per married couple in certain circumstances. (All That Investors Need to Know About Gold and Tax | The Royal Mint)
Pensions: Gold for Pensions
At The Royal Mint, we facilitate the purchase of gold bullion bars via our Gold for Pensions service for Self-Invested Personal Pensions (SIPPs) and Small Self-Administered Scheme (SSAS) pensions. We provide gold investment for both SIPP schemes and Junior SIPPs.
A Junior SIPP could provide an alternative means to create a nest egg for loved ones, whilst also providing a tax-efficient means of generational wealth transfer. Junior SIPPs allow for a parent or guardian to make gross contributions (grossed up to a maximum contribution of £3,600 for the 2024/25 tax year) into a SIPP, held in trust, for the benefit of their child. These are effectively gifts which would then fall outside of the parent/guardian’s estate for the calculation of IHT.
A SIPP is not subject to IHT, and in some circumstances can also be inherited tax-free by your nominated beneficiaries (children/grandchildren). To learn more, please visit our Gold for Pensions page to discover more about our flexible investment options.
The interplay between taxation and family wealth is a complex one and it is widely recommended that proper financial and tax planning is considered when looking to make prudent, tax-efficient savings and investments. (Gifts and exemptions from Inheritance Tax | MoneyHelper)
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Tax Disclaimer
Please be advised that The Royal Mint are not tax advisers and any information provided on our website in connection with the tax status of products is provided for general information purposes only, and should not be relied upon; in particular, the underlying tax legislation is always subject to change. You should obtain any specific advice from your tax adviser.
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Notes
The contents of this article are accurate at the time of publishing, are for general information purposes only and do not constitute investment, legal, tax or any other advice. Before making any investment or financial decision, you may wish to seek advice from your financial, legal, tax and/or accounting advisers.
This article may include references to third-party sources. We do not endorse or guarantee the accuracy of information from external sources, and readers should verify all information independently and use external sources at their own discretion. We are not responsible for any content or consequences arising from such third-party sources.
Sources
https://www.royalmint.com/invest/discover/gold-market/the-legacy-of-gold-inheritance/
https://www.royalmint.com/invest/discover/invest-in-gold/passing-wealth-through-the-generations/
Gift: Meaning, Tax Considerations, Example (investopedia.com)
