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The CGT exemption on Gold Sovereigns and Britannias stops at death. It covers capital gains during your lifetime - nothing more. When you die, those coins are valued at full market price and included in your estate for inheritance tax purposes.
This is the most common misunderstanding about precious metals and tax in the UK. People buy Sovereigns because they’re CGT-free, and assume the exemption extends further than it does.
IHT basics as they apply to gold
IHT is charged at 40% on the value of an estate above the nil-rate band (NRB). In 2026, the NRB is £325,000, rising to £500,000 with the residence nil-rate band for direct descendants inheriting a family home.
Gold and silver held at death are valued at their market value on the date of death - the probate value - and included in the estate for IHT purposes.
A holding of 50 Gold Sovereigns worth approximately £47,500 would increase an estate’s IHT liability by approximately £19,000 (40% × £47,500) if the estate is above the NRB threshold.
The CGT-free status of Sovereigns and Britannias is entirely irrelevant to IHT. The two taxes operate independently. (See: capital gains tax on gold and silver.)
How gold is valued for probate
HMRC expects the executor to obtain a professional valuation at the date of death. For bullion coins and bars, this is typically based on the gold spot price on the date of death, adjusted for the coin’s specific nature (standard bullion date = melt value; numismatic items may require specialist valuation).
Major UK dealers can provide probate valuations. The Royal Mint offers this service, as do Chards and Atkinsons.
IHT planning strategies
1. The seven-year gift rule
Gifts made more than seven years before death are generally exempt from IHT - they fall outside the estate entirely. Gifts made within seven years are subject to a taper relief schedule:
| Years before death | IHT rate on the gift |
|---|---|
| 0–3 years | 40% |
| 3–4 years | 32% |
| 4–5 years | 24% |
| 5–6 years | 16% |
| 6–7 years | 8% |
| 7+ years | 0% |
Gifting gold to family members and surviving seven years completely removes the gift from the estate. Note: CGT may be triggered at the point of gifting (see the gifting gold guide), but Gold Sovereigns and Britannias are CGT-free even on gift.
2. Spousal transfer
Transfers between UK-domiciled spouses or civil partners are fully exempt from both IHT and CGT during life and at death. A surviving spouse inherits gold at market value with no IHT due. The estate benefits from the unused NRB of the first spouse to die, potentially doubling the threshold to £650,000.
3. Annual exemption
Each individual can give away £3,000 per tax year free of IHT - no seven-year waiting period required. This is the annual gift exemption. For gold holdings, gifting individual coins worth less than £3,000 per year can gradually reduce the estate without the seven-year clock.
4. Normal expenditure out of income
Gifts made as part of your normal expenditure from income (not capital) can be exempt from IHT with no limit. This is relevant for investors who are buying gold from income and gifting it regularly - the gifts may qualify as normal expenditure out of income if they follow a pattern.
Key differences: CGT vs IHT for gold
| CGT | IHT | |
|---|---|---|
| Tax event | Sale or disposal | Death (or certain lifetime gifts) |
| Rate | 18% / 24% | 40% |
| Sovereign/Britannia exemption | Yes - fully exempt | No - fully taxable |
| Annual allowance | £3,000 (2026/27) | £325,000 NRB |
| Spousal exemption | Yes | Yes |
| Reporting | Via Self Assessment | Via IHT400 form |
Physical gold and probate practicalities
Executors need to physically locate any gold held at home before the estate can be administered - which sounds obvious until you’re the one going through someone’s possessions not knowing where things are. Vault accounts and safety deposit box arrangements require contacting the provider with probate documentation, and this process can drag on for weeks.
Including clear details of any gold holdings in your will, or in a letter of wishes held with your solicitor, saves your executor significant time. Where the gold is, what it is, roughly what it’s worth, and who the account is with - that’s all they need.
This guide contains factual information only and does not constitute financial or tax advice. IHT is a complex area - for estates above the nil-rate band with significant gold holdings, professional advice from an estate planning solicitor or IFA is worth seeking.
Frequently asked questions
Are Gold Sovereigns subject to IHT? Yes. The CGT exemption for Sovereigns and Britannias does not extend to IHT. All gold in an estate above the nil-rate band threshold is subject to 40% IHT.
Can I avoid IHT on my gold by gifting it to my children? Gifts of gold to children can be IHT-exempt if you survive seven years after making the gift. Gifting a Gold Sovereign triggers no CGT (it is CGT-free). The seven-year clock starts on the date of the gift.
Does gold held in a vault abroad avoid UK IHT? No. UK domiciled individuals pay IHT on worldwide assets, regardless of where they are physically located. Gold in a Swiss vault forms part of the UK estate for IHT purposes.