Investment gold and gold coins

By Tolley

The following Value Added Tax guidance note by Tolley provides comprehensive and up to date tax information covering:

  • Investment gold and gold coins
  • What is investment gold?
  • Opting to tax
  • Invoicing
  • Specific transactions
  • Imports and exports
  • Penalties
  • Investment gold coins

This guidance note provides an overview of the VAT treatment of supplies of investment gold and gold coins. For supplies of non-investment gold see the Supplies of non-investment gold guidance note for more information.

Notice 701/21 ; VGOLD1000

See the Flowchart – is the supply of gold within the scope of UK VAT? for further assistance on determining the correct VAT treatment of the transaction.

A special VAT scheme is applicable to supplies of investment gold. The scheme is intended to put investment in gold on a similar footing with other financial investments, such as shares, by making it exempt from VAT. Businesses are normally unable to reclaim input tax directly attributable to an exempt supply. However, unlike shares, gold may be purchased from a variety of taxable sources before being transformed into investment gold, and as a result VAT will be incurred on the purchase. If the normal rules applied, the input tax incurred on the cost of purchasing the gold would not be reclaimable and the seller would either have to absorb the VAT cost or pass it on to the investor which could make investing in gold less attractive. The investment gold scheme has three special features:

  • certain persons may opt to tax specified transactions which will enable them to reclaim all of their input tax (subject to the normal rules)
  • VAT registered businesses can reclaim the input tax incurred on purchases of gold and on the costs of transforming any gold into investment gold
  • VAT registered businesses who are producers and transformers of investment gold can reclaim the input tax incurred on certain costs linked to the production or transformation process

The special scheme for investment gold also allows special procedures for transactions on the London Bullion Market. See the Trading

More on Exempt supplies: