Investing in Gold Coins in the UK: A Beginner's Guide

Gold has been valued for thousands of years, and in uncertain times many people turn to it. Gold coins are one of the simplest ways to own it: you can hold one in your hand, store it at home or in a vault, and sell it when you choose. But gold coins are not risk-free, and they suit some people far better than others.

This guide covers the main coins, the costs involved, how tax works and how to buy and sell sensibly. It is general information, not financial advice.

Why people buy gold coins

Gold is often held as a store of value and as a hedge when other assets are uncertain. It has no counterparty, which means it does not depend on a company or a government's promise to pay. Its price can fall as well as rise, and it pays no income, so it suits some people as one part of a wider plan rather than the whole of it.

Why coins rather than bars? Coins are small, recognisable and easy to sell in small amounts. Compare the two in gold coins vs gold bars.

The main coins to consider

• Sovereign. 7.98g, 22ct, holding about 7.32g of pure gold. British, widely recognised and easy to sell. See our sovereigns and the sovereign buyer's guide.
• Half sovereign. 3.99g, 22ct, holding about 3.66g of pure gold. A smaller unit, handy for selling a little at a time.
• Gold Britannia. The Royal Mint's bullion coin, in sizes from 1/10oz to 1oz. See Britannias.
• Krugerrand. The South African 1oz coin, 22ct, holding one troy ounce of pure gold. See Krugerrands.
• Maple Leaf. The Canadian 24ct coin.

The costs to understand

• The premium. You pay above the gold price when you buy, and dealers pay below it when they buy back. The gap is the spread, and it is why gold is better as a longer-term holding than for short-term trading.
• Storage and insurance. Home insurance often limits cover for valuables, so check your policy or consider a safe deposit service.
• No income. Gold pays no interest or dividends. Any return comes from the price changing.

Tax

Investment gold coins are generally VAT-free, and British legal tender coins such as sovereigns and Britannias are generally exempt from Capital Gains Tax. Foreign coins such as Krugerrands may not be exempt. Read our guides on VAT and selling tax, and check current rules on gov.uk.

Buying sensibly

• Buy from a dealer with a real address, clear terms and a returns policy.
• Check the weight, size and design against known specifications.
• Be wary of any price well below the gold value. If it looks too good to be true, it is.
• Ask what the premium over gold is.
• Keep invoices and records.
• Start small and build up if you are new to it.

Common mistakes

• Paying a large premium for a coin that is worth its gold.
• Buying on hype or fear rather than a plan.
• Putting more into gold than you can afford to leave alone.
• Not thinking about how and where you will store it.
• Forgetting to plan how you will sell.

Selling later

Plan how you will sell before you buy. Common recognisable coins in good condition are the easiest to sell. When you are ready, sell your gold coins with a free valuation, and see how to sell gold coins for a step-by-step approach.

Frequently asked questions

Is gold a good investment?

That depends on your goals and circumstances. The price can fall as well as rise. This is not financial advice, so consider speaking to a qualified adviser.

How much should I buy?

There is no standard answer. Many people hold gold as a small part of a wider mix, and only with money they will not need soon.

Which coin is best for a beginner?

Common, recognisable coins such as sovereigns and Britannias are the easiest to buy, check and sell.

Ready to look?

Browse our gold sovereigns and gold Britannias, or request a free valuation if you already own coins.