Tax Advantage Benefits of Silver

Tax advantages of silver
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One of the many reasons a lot of people are keen to invest in silver is that it offers certain tax advantages over other investments. Silver like many other commodities is subject to both VAT and Capital Gains Tax here in the UK, however there are ways around this which we will talk about in the following article.

What is Capital Gains Tax?

Capital Gains Tax (CGT) is a tax imposed by the government on any item you sell and have made a profit on. CGT applies to nearly all assets, whether it’s precious metals, property, stocks or shares. Most people who invest in silver won’t have to worry about ever paying CGT as you are tax exempt up to a value of £11,300 each financial year. This figure also doesn’t include your original outlay so for example, if you bought £25,000 worth of silver and sold it for £35,000, you would have only made a profit of £10,000 and therefore would not need to pay CGT.


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CGT also applies to any assets that you’ve disposed of in the current year. For example, if you’ve given away an asset or swapped it from something else then you may have to pay CGT. Insurance payouts for assets that have been lost or stolen are also subject to CGT.

Tax advantage benefits of silver
Avoid VAT and CGT by purchasing silver

Why invest in silver?

If you’re currently in a high tax bracket, you might pay less CGT on gold and silver as they are only taxed for capital gains tax purposes at the marginal rate of 28%. Even if an investor is in the 33%, 35% and 39.6% tax brackets the marginal rate of 28% only will apply.

Certain bullion coins are also exempt from CGT tax altogether in the UK. All coins produced by the Royal Mint and classed as British legal currency are exempt from Capital Gains Tax. This includes all silver Britannia coins and post-1837 sovereign coins. You can therefore make an unlimited tax-free profit on any of these coins.

Tax advantages of silver
Canadian Silver Dollars

Less VAT

The purchase of silver incurs a VAT of 20% here in the UK. However, certain brokerages or suppliers of silver are able to sell it to you at a lower rate or sometimes even VAT free. Countries such as Germany have very a low VAT on silver whilst Estonia currently have zero VAT on all silver coins that are legal tender silver. That’s why a lot of silver stackers source their silver from abroad.

You can also avoid paying VAT on silver if you store bullion bars in an accredited vault with an allocated account. This is because when silver is stored like this it isn’t classified as being in circulation and therefore it is not subject to VAT. The moment you take it out of the vault however, it would then be deemed to be in circulation and you would have to pay VAT.

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Purchasing silver from Physical Gold

Here at Physical Gold we offer the chance for UK buyers to buy our silver coins  and silver bars without charging you any VAT whilst delivering them straight to your door. We are able to offer this opportunity through careful sourcing of our coins and bars which allows us to exploit certain tax advantages in the EU. As UK silver coins are legal tender they are also exempt from CGT, so you can buy Silver Britannia’s from us without paying any tax at all! Please call 020 7060 9992 for more information.

Image Sources: Geralt and Lecho 0047

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