On this page
Investment-grade gold is gold that meets specific purity and form requirements defined by HMRC to qualify for VAT exemption. The threshold is 995 parts per thousand (99.5%) fine or above for bars and granules, and 900 parts per thousand (90%) fine or above for coins on HMRC’s qualifying list.
Buying investment-grade gold means paying no VAT. Buying gold that does not qualify - such as jewellery, most collector coins above numismatic value, or gold below the fineness threshold - means paying 20% VAT.
What qualifies as investment-grade gold
Bars and granules
Any gold bar or granule with a purity of 99.5% (995/1000) or above is investment-grade and VAT-exempt. This covers:
- Standard retail bars from PAMP, Heraeus, Argor, Umicore, Baird & Co, Royal Mint, and other accredited refineries
- LBMA Good Delivery bars (400oz institutional bars)
- Gold granules (used in industry but available to investors)
Coins
Coins must meet two conditions to be VAT-exempt:
- Gold purity of 90% (900/1000) or above
- Must be on HMRC’s published list of qualifying investment gold coins, OR must have been minted after 1800 and be - or have been - legal tender in its country of origin
HMRC publishes a specific list of qualifying coins at gov.uk - the Gold Sovereign and Gold Britannia are both on it, as are most major bullion coins: Krugerrand, Maple Leaf, Philharmonic, American Eagle.
What does not qualify
Jewellery: Not investment-grade, regardless of gold content. 18-carat gold jewellery is 75% gold - below the 99.5% bar threshold. Subject to 20% VAT on purchase.
Collector coins above numismatic premium: If a coin sells at a significant premium to its gold content value because of rarity or collectibility, HMRC may treat the transaction differently. Standard bullion coins are straightforward; unusual numismatic items less so.
Gold below the fineness threshold: 9-carat or 14-carat gold items are not investment-grade.
Gold ETFs and financial instruments: VAT does not apply to financial instruments in the same way - but the investment-grade classification is a physical gold concept.
CGT implications
Investment-grade status determines VAT treatment. CGT treatment is a separate question governed by legal tender classification.
| Product | Investment-grade (VAT-free) | CGT-free |
|---|---|---|
| Gold Sovereign | Yes | Yes - UK legal tender |
| Gold Britannia | Yes | Yes - UK legal tender |
| LBMA gold bar (999.9) | Yes | No - not legal tender |
| Krugerrand | Yes | No - not UK legal tender |
| Gold jewellery | No - taxed at 20% VAT | No - not legal tender |
| 9ct gold ring | No | No |
The distinction matters: a 1oz gold bar is investment-grade (no VAT) but not CGT-free. A Gold Sovereign is investment-grade (no VAT) and CGT-free. Gold jewellery is neither.
Practical implications for buyers
Understanding investment-grade status protects against two common mistakes:
Buying jewellery as an investment: Gold jewellery carries 20% VAT and has a large buy-sell spread due to design and retail margins. It is not an efficient way to hold gold as an investment.
Assuming all gold coins are VAT-free: Most widely traded bullion coins are on HMRC’s qualifying list. Obscure historical coins or commemorative issues outside the list may not be. Verify with the dealer if buying unusual coins.
Frequently asked questions
Is 22-carat gold investment-grade? Yes. 22-carat gold is 916.7 fine (91.67% pure), which is above the 90% threshold for coins on HMRC’s qualifying list. Gold Sovereigns and pre-2013 Gold Britannias are 22-carat and qualify.
Is 18-carat gold jewellery VAT-exempt? No. Gold jewellery is not investment-grade regardless of purity. It is a manufactured item, not an investment gold product, and VAT applies.
Where is HMRC’s qualifying coins list? At gov.uk under VAT Notice 701/21 (Gold). The list is updated periodically.