The Secret Inheritance Tax Advantage Few People Know About

If you only do yourself one favour in 2025, get wise about the tax advantages regarding Gold Sovereigns and estate duty.

On 20 June 1897 Queen Victoria's Diamond Jubilee was celebrated. Queen Victoria had been on the throne for 60 years, something practically unheard of in the 19th Century.

Most people in that era died young; medical science hadn't advanced to the extent it has today.

So what's the big deal I hear you ask? Well, a Gold Sovereign Minted in 1897, or any other significant year, will have a greater value than one minted the year before ...

... and, in 1897, there were no Full Sovereigns minted, only Half Sovereigns. They're not especially rare today, but have the potential to become rarer as more people look to assets that can shield their estate from the Taxman's clutches.

My Financial Adviser Friend Came To Tea -

She was completely unaware that Gold Sovereigns were free of Capital Gains Tax (CGT), and also Inheritance Tax in the UK.

She was aware that the term ‘capital gains’ refers to the amount of money made once the original purchase price has been taken into account. For example, if you buy a gold bar for £2,000 and then go ahead and sell it for £3,000, your capital gains liability amounts to £1,000. This is the taxable amount, not the full £3,000 you receive.

Now, under the current tax law, there is a threshold currently in place under which no CGT is applied.

In the UK for 2024/25, this stands at £3,000. This means that for the first £3,000 you earn per financial year as a result of selling items like bullion, you will not have to pay any CGT. For anything over that threshold, the tax applied stands at 10% if you pay basic income tax and 20% if you pay the higher rate.

She asked me why she didn't know about this - "because," I explained, "Financial Companies want Advisors to sell policies, not bullion and valuable coins!"

Likewise, my brother didn't believe me until he spoke to a 'bloke down the pub' who assured him I was right.

Gold Coins and Capital Gains Tax

Any gold coins produced by The Royal Mint are considered legal tender. As such, they are exempt from capital gains tax and may be bought and sold freely.

This applies no matter the volume or value of sales, making it an attractive option to investors.

Inheritance Tax

Under the current Tax Laws, there is usually no inheritance tax to pay if the value of a person’s estate is valued at less than £325,000.

Anything above this threshold may be subject to inheritance tax. However, if the estate is left to a spouse or civil partner, no inheritance tax is due. If your home is given away to children, the threshold increases to £500,000.

Buying and owning gold can be a tax-efficient and practical way to transfer wealth to loved ones, especially after death.

Gold collections are considered to be private assets, meaning that, unlike equities, cars, or properties, there is no requirement to formally register ownership.

It's important to note that ownership should be properly transferred and documented for legal purposes, especially when it comes to tax considerations.

Gold is an asset that is often used to safeguard wealth. Especially during times of uncertainty, such as rising inflation, low interest rates, and wars. There is always the option of leaving wealth in the bank, which may erode in value over time.

Be aware, the value of gold can also go down. In 2025, experts predict the gold price will go up 13% by the end of the year.

UK residents can benefit from tax exemptions on gold coins such as Gold Britannias and Gold Sovereigns. These coins aren't subject to Capital Gains Tax (CGT) when sold, and also qualify for VAT exemption.

Many people looking to transfer wealth often choose to gift gold coins during their lifetime.

Gifting gold coins as Christmas or birthday presents can help distribute wealth within the £3,000 inheritance gift allowance, though larger gifts may still be subject to inheritance tax if the donor passes away within 7 years of the gift.

By Alexander Grey on Unsplash

I had my 'lightbulb moment' when considering 'Downsizing' and selling my furniture at auction.

After the Coronavirus Pandemic, when a huge number of older people passed away, the beautiful antique items coming up for sale were breathtaking.

I noticed an abundance of Gold Sovereigns, full sovereigns, and half sovereigns.

So I did some research ... then I discovered the TAX ADVANTAGES!

My career was in Pensions. I'm acutely aware of the Demographic Time Bomb facing most developed countries (the number of Babies being born is insufficient to support an increasingly older generation.)

A huge burden on future generations - I just hope Elon Musk can develop some pretty amazing robots!

Thank you for reading to ... THE END

Pamella Richards

Beekeeper and lover of the countryside. Writer, Gardener and Astrologer

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Pamella Richards (You)

about 19 hours ago

Sorry, there's a typo in the 5th paragraph, should read '1897', not '1987'.

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