What Is Investment Gold?

Author: Lawrence Chard - Director and Expert Numismatist

Published: 19 Nov 2018

Last Updated: 21 Feb 2022


Gold is always a great investment. "Investment Gold" even has its own legal definition.

Definition of Investment Gold

What Is Investment Gold 265

For the purpose of VAT exemption, "Investment Gold" is defined as per HMRC Notice 701/21 as either:

(a) gold of a purity not less than 995 thousandths that is in the form of a bar, or a wafer, of a weight accepted by the bullion markets.

(b) a gold coin minted after 1800 that is:

  • of a purity of not less than 900 thousandths.
  • (or has been) legal tender in its country of origin.
  • of a description of coin that is normally sold at a price that does not exceed 180 per cent of the open market value of the gold contained in the coin.

(c) an investment gold coin as specified in Investment gold coins (VAT Notice 701/21A).

A Clarification

Perhaps the most commonly misunderstood part of the investment gold definition is the “180% rule” and what “normally sold” means.

This is however, clarified in section 2.4 of HMRC Notice 701/21:

The normal selling price of coins is influenced by the finish. Investment gold coins fall into two broad classes. The first consists of relatively older issues made to circulate as currency. The second, generally more recent, were primarily produced as a store of wealth. The first will normally be worn from circulation. The second type may have been issued in a number of finishes and if the majority of a type of coin are for example ‘brilliant uncirculated’ quality then, other things being equal, the brilliant uncirculated value will reflect the normal selling price. On the other hand, if the majority of a particular coin are ‘proof’, then the value of the proof coin will more likely reflect the ‘normal’ selling price. The test of normal selling price must take into account these factors and be based on the condition in which the gold coin type is most frequently traded.

Many people misunderstand it as applying to each individual coin, rather than to the type of coin as a whole.

As an example:

If we ask £100K for an 1841 MS 70 gold sovereign, that's clearly more than 80% premium, but because it is a gold sovereign, and gold sovereigns "normally" sell for a small premium, then it qualifies as "Investment Gold".

It is also irrelevant whether a coin is bullion or proof. A proof sovereign is still a sovereign.

VAT Exemption

As from 1st January 2000, investment gold became exempt from VAT in the United Kingdom due to an EU directive.


Please be aware that for callers to our showroom who wish to buy investment gold, we must see two forms of identification. Please see our identification page for further details.

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