Passing it on: gifting, inheritance and records

The CGT exemption stops at inheritance tax

You will know from earlier in the Academy that UK legal tender gold coins are exempt from Capital Gains Tax for UK residents, because they are legal tender. It is one of the reasons the sovereign and the Britannia occupy the place they do in British holdings.

Here is the point that surprises people. That exemption belongs to one tax and one tax only. It does not travel across to inheritance tax.

When you die, your gold forms part of your estate exactly like a house, a bank balance or a share portfolio. It is valued, it is added to the total, and it is assessed under the same inheritance tax rules as everything else you owned. There is no special coin exemption, no bullion carve-out, and no distinction between coins sitting in a vault and coins sitting in a drawer at home. Gold held through a company or a trust follows different rules again, which is a conversation for a solicitor rather than a lesson.

That is the whole of the tax story for most people, and it is worth stating plainly, because it is a point people are often unsure about. Gold is not a way around inheritance tax. It is an asset in the estate.

What follows is the part that actually decides outcomes: what you do while you are alive, and what you write down.

Lifetime gifting, and the qualifying period

One mechanism people use with assets of any kind is the lifetime gift. The principle is simple. If you give something away outright and you then survive the qualifying period HMRC sets for potentially exempt transfers, seven years at the time of writing, the gift generally falls outside your estate for inheritance tax. If you die within that period, the gift is brought back into the calculation, and the tax position depends on how long ago the gift was made and on the rest of the estate.

Three details matter more than the headline.

First, the gift has to be a genuine transfer. If you hand coins to a family member but keep them in your own safe, keep using them as your own, or expect them back, HMRC may treat that as a gift with reservation of benefit, and it stays in your estate. A gift you still control is not a gift.

Second, gifting a chargeable asset can create a Capital Gains Tax disposal for the giver, because the transfer is normally treated as taking place at market value even though no money changes hands. UK legal tender gold coins are exempt from CGT for UK residents, so that particular complication does not arise for them. It does arise for other assets you might gift alongside them, and that is a question for a tax adviser rather than something to work out from a web page.

Third, these rules change. Governments revisit inheritance tax and gifting regularly. Treat the qualifying period as the mechanism as it stands at the time of writing, not as a permanent feature of the landscape, and check the position at the time you act.

Gold inside a pension or an ISA

Two questions tend to arrive at about this point, and they belong to a different rulebook from the rest of this Academy. Can gold be held inside a pension? Can it be held inside an ISA?

Everything the course has described so far is direct ownership. You buy the coins, they are yours, they are held in your name or in your hands, and they sit in your estate. Gold held inside a tax wrapper is a different arrangement, and the wrapper sets the terms. It decides which forms of gold may be held, if any may be held at all, who may hold them, how the holding is administered, and how it is taxed going in, while it sits there, and coming out. Those answers are not the answers given in the Capital Gains Tax and VAT lessons, and they differ between wrappers and between individual schemes.

It matters for this lesson in particular, because what happens on death differs too. A pension is generally dealt with under the scheme's own rules and the nomination you have left with the administrator, rather than through your will, so the inventory and probate steps described below are not the whole story for anything held that way.

That is as far as a written lesson can honestly take it. If you are considering holding gold inside a pension or any other wrapper, put the question to a regulated financial adviser and to the scheme administrator before you commit money to it, and get the answer in writing. It is worth asking properly rather than assuming the treatment set out here carries across.

The inventory your executor will need

Now the part that determines whether a family sees the gold at all. Tax is the visible problem. Records are the real one.

Executors and personal representatives cannot deal with what they cannot find, identify or value. A drawer of loose coins with no paperwork is a genuine problem for a grieving family: they do not know what the coins are, whether they are graded, what they cost, where they came from, or what they are worth. A single sheet of paper solves most of it.

Write an inventory. One row per item, kept current, held with your will or alongside it. For each coin, record:

Keep the invoices and the grading certificates in the same place as the inventory, not scattered across email folders and box files. Independently graded coins are unusually easy to document here, because the certificate number does the identifying work: anyone can look it up and confirm what the coin is and how it was graded.

Access: how an executor reaches a vaulted holding

The second half of the record is access. Storage is covered earlier in the Academy, but the succession question is separate and specific: if you are not there to make a phone call, how does someone else reach the gold?

Write down the storage provider, the account or client reference, and the named contact who administers your holding. If your coins are stored in segregated vaulting, the gold is recorded as yours specifically, which means an executor is asking the vault to identify property already registered in your name rather than trying to establish a claim from scratch. A named point of contact at the dealer who arranged the storage shortens that conversation considerably.

Vaults and dealers will not simply release a holding on request. Expect them to ask for the death certificate and, in most cases, the grant of probate (confirmation in Scotland), plus identification for the executor. This is normal and protective, and it is much faster when the account details were written down in advance.

If some or all of the gold is at home, say so, say where, and make sure your home insurer's position on the holding is written down too. Coins found unexpectedly during a house clearance are the worst case in this entire lesson.

Valuation, transfer and delivery

For probate, the estate is valued at the date of death. That means the open market value of each item on that specific day, not what you paid, and not what it was worth when you last checked. For gold coins this has two components: the metal value, derived from the live spot price on that date, and any premium the coin carries above metal for its rarity or its graded condition.

This is where the detail on your inventory earns its keep. A common sovereign is priced close to its gold content, so the valuation is largely arithmetic. A coin with genuine condition rarity, sealed in its holder, may be worth meaningfully more than its metal, and an executor who values it as scrap gold will understate the estate and may sell it badly. Your inventory, with grades and certificate numbers on it, is what tells them the difference. A dealer or a specialist valuer can produce a written date of death valuation from that information.

Once probate is granted, there are usually two routes. The holding can be transferred to a beneficiary, which typically means opening a storage account in their name and moving the coins across within the same vault, with no physical movement of metal at all. Or the coins can be delivered, insured and signed for, to the beneficiary's address. Beneficiaries who would rather have cash can sell instead, which is the ordinary buy-back route covered earlier in the Academy.

Whichever they choose, the CGT position of the beneficiary starts fresh: they acquire the coins at the probate value, and for UK legal tender coins the exemption applies to a UK resident beneficiary as it did to you.

Tell someone

The single most useful thing in this lesson costs nothing and takes five minutes.

Tell somebody the gold exists.

Gold is private, and privacy is part of why people hold it. But privacy taken all the way to secrecy is how holdings are lost. Your executor does not need a running valuation or a lecture on grading. They need to know that a holding exists, that an inventory exists, and where to find it. One sentence to a spouse, an adult child or a solicitor, plus a note lodged with your will, covers it.

Then keep it current. Review the inventory whenever you buy, sell or move something, and check once a year that the storage details and named contact are still right. A document that was accurate six years ago and has been silent since is only slightly better than no document.

Do that, and the gold behaves like the rest of a well-organised estate: identifiable, valuable, and straightforward to pass on.

The value of gold can fall as well as rise. Buying and holding physical gold is not a regulated activity in the United Kingdom, so there is no FSCS protection and no access to the Financial Ombudsman Service. Tax treatment depends on your individual circumstances and can change. Nothing here is tax or legal advice, and estates are individual: inheritance tax, gifting rules and probate procedure are matters to take to a qualified solicitor or tax adviser before you act.