The Royal Mint has witnessed a surge in the number of individuals flocking to purchase gold coins, with figures doubling compared to the previous year as people aim to safeguard their wealth. The global price of gold has significantly risen over the past year, mainly attributed to economic instability associated with the crisis in the Middle East and Russia’s invasion of Ukraine. The demand for gold coins has been fueled further by speculations that Chancellor Rachel Reeves is considering raising Capital Gains Tax (CGT) on profits from asset sales like shares and property. There is mounting pressure on ministers to increase CGT from the current average of 20% to align it with income tax rates of 40% or 45% for high earners, potentially making owning shares and property less attractive. This impending change has led to a growing interest in investing in gold coins, which are not subject to CGT on any value appreciation, making them a more appealing option. As a result, between July and September, the Royal Mint has observed a 118% surge in gold coin sales. Their research also indicates that 44% of UK investors are considering investing in CGT-exempt bullion coins to bolster their wealth and reduce their tax liabilities.
The Royal Mint highlighted that an increasing number of people are exploring the tax-efficient status of gold coins. While CGT is imposed on gold and silver in the form of small bars, it does not apply to bullion coins issued by the Mint. During the same period, revenue from silver and gold sales rose by 42% and 118% respectively, compared to last year. However, there was an 11% decrease in the sales of bullion bars, which are subject to Capital Gains Tax (CGT). Stuart O’Reilly from the Royal Mint commented on the factors influencing gold prices, citing interest rate changes on both sides of the Atlantic and economic uncertainties that are driving demand for safe haven assets. O’Reilly noted a shift in investor preferences towards tax-efficient investments, with a particular focus on bullion coins. With the UK budget approaching and uncertainties surrounding the US election, there may be further changes in investor behavior. The trend towards tax-efficient investing is evident as investors increasingly favour CGT-exempt investments like bullion coins over those subject to CGT.
In conclusion, the ongoing economic uncertainties and potential tax changes have prompted a significant rise in the demand for gold coins among investors seeking to protect their wealth and minimize tax obligations. The Royal Mint’s report on the surge in gold coin sales reflects a broader trend towards tax-efficient investments in the current financial climate. Investors are increasingly turning to assets like bullion coins to safeguard their investment gains in the face of evolving economic conditions and tax policies.
This story highlights the growing interest in tax-efficient investments like gold coins amidst economic instability and potential tax changes, underscoring investors’ efforts to protect and grow their wealth while minimizing tax liabilities.