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The British Sovereign is one of the most widely traded gold coins in the World. Besides the intrinsic gold value that these coins hold, their appeal stretches beyond their weight in gold due to exemption from capital gains tax.
The British Sovereign is one of the most widely traded gold coins in the World. Besides the intrinsic gold value that these coins hold, their appeal stretches beyond their weight in gold due to exemption from capital gains tax. The Full Sovereign weighs 7.9g, with the Half Sovereign weighing 3.9g, and the much more recent Quarter Sovereign weighing 1.9g. All Sovereigns are struck in .916 2/3 fineness, more commonly known as 22ct, and have been Minted by either the Royal Mint in London, or a royally sanctioned Mint in Australia, India, Canada or South America. Regardless of the country in which these coin have been minted, they all carry the British Design, and therefore remain legal tender, with a nominal value of one pound sterling. Needless to say the market value of these coins as an investment is significantly higher than their £1 face value. Capital Gains Tax Exemption British coins minted in 1837 or later years have unique appeal to the knowledgeable investor- they are exempt from Capital Gains Tax (CGT). Capital Gains Tax is a tax on the profit that one makes on disposal of assets. This exemption is not just true for the British Sovereign minted in 1837 and later years, but also include the larger one ounce Britannia's, and the five & two pound coins. The British Coins along with all other 'investment' coins and bullion bars (as outlined by the European Commission) are tax-free. The additional benefit to Buying the British coins outlined above over a bullion bar or foreign coin is that they remain exempt from capital gains tax when selling on for a profit (or a capital gain). It is absolutely apparent that these coins have, and always will be, considered a valuable bullion asset. However, it is their Capital Gains Tax exemption that has facilitated the demand for British gold coins in recent years. About Capital Gains Tax In the UK, Capital Gains Tax is applicable for all profits over £10,100.00. It is important to clarify that capital gains tax is only applicable to profits made when selling, and not the total amount of the sale. For many individual investors and coin collectors this CGT annual limit is not likely to be reached on profits alone. However, for the larger investors buying British coins is definitely worth some thought. It is for this exemption that British Sovereigns, along with many other British Coins, are seen as the most advantageous ways of purchasing large quantities of investment gold. Extract from HMRC CG78307 - Foreign currency: coins: legal tender Coins are to be regarded as currency only if they are legal tender at the time of their acquisition or disposal. Coins which are currency but not sterling, for example Krugerrands, are chargeable assets.
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