UK gold market
London is one of the world's main gold trading hubs, and the twice-daily LBMA gold price set here is the global benchmark dealers everywhere reference. For ordinary buyers, though, gold reaches you through two very different channels. Investment bullion — bars and coins — is priced per troy ounce in pounds sterling, tracking the spot price plus a dealer premium. Retail jewellery is priced per gram, with making charges added on top.
The Royal Mint's two flagship products dominate the investment market. The Gold Britannia, issued since 1987 in 999.9 fine gold, and the Gold Sovereign, struck since 1817, are the coins British investors know best. Bars from one gram up to a kilogram are also widely available from online bullion dealers and high-street specialists, with buy-back prices quoted as a small spread below spot.
Britain's South Asian communities add a distinctive layer to the market. Many jewellers serving these customers still quote in tolas — one tola equals 11.66 grams — and 22-carat gold jewellery remains the standard for weddings and festivals. If you see a price "per tola" in a British jeweller's window, dividing by 11.66 gives you the per-gram equivalent.
Taxes and rules
Investment-grade gold — defined by HMRC as gold of at least 995 fineness — is exempt from VAT in the UK under VAT Notice 701/21. This covers qualifying bars and bullion coins. Gold jewellery, however, carries the standard 20% VAT, as do silver, platinum and palladium regardless of form.
Capital gains tax is where British gold buyers get a notable advantage. Gold Britannias and Sovereigns are UK legal tender, which makes them exempt from CGT entirely — no matter how large the gain. Other gold bars and foreign coins are not exempt: gains above the annual CGT allowance (currently £3,000) are taxed at 18% for basic-rate taxpayers and 24% for higher-rate taxpayers. Tax rules change, so confirm the current position before making large purchases or sales.
For zakat calculators
British Muslims commonly use the gold nisab of 87.48 grams when calculating zakat. Because UK jewellery is often quoted per gram, converting holdings to grams is straightforward — and where family gold was bought per tola, remember that 7.5 tolas is roughly equal to the 87.48-gram nisab. Some scholars prefer the lower silver nisab; a calculator that checks both gives the fuller picture.
Try our free zakat calculator with live prices and automatic nisab check. Farmers: also see our ushr calculator.
Frequently asked questions
Is VAT charged on gold coins in the UK?
No, provided the coin qualifies as investment gold — at least 995 fineness for the metal content rules HMRC applies. Britannias, Sovereigns and most recognised bullion coins are sold VAT-free. Proof or collectible coins bought mainly for their rarity can be treated differently, so check before you buy.
Are Gold Britannias really free from capital gains tax?
Yes. Because Britannias are UK legal tender, gains on their disposal are exempt from CGT for UK residents, with no upper limit. This is a specific legal-tender exemption — it does not apply to gold bars or foreign coins such as Krugerrands or Eagles.
How is the gold price quoted in the UK?
Wholesale and investment gold is quoted per troy ounce in pounds sterling, following the LBMA benchmark. High-street jewellers quote per gram, usually by carat. In areas with large South Asian communities you will also see per-tola pricing; one tola is 11.66 grams.
What is the difference between a Sovereign and a Britannia?
The Sovereign is a historic 22-carat coin first struck in 1817, containing just under a quarter of a troy ounce of gold. The Britannia is a modern 999.9 fine bullion coin issued since 1987, most commonly in the full one-ounce size. Both are CGT-exempt and VAT-free as investment gold.
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