UK Gold Coin Sales Jump as Investors Fret Over Potential Labour Government Tax Changes

The total value of gold coins that don’t attract capital gains sold on the Mint’s website jumped by 9% during April-June from a year earlier

Sales of tax-exempt gold coins surged at the UK’s Royal Mint in the last quarter as investors grew concerned about potential changes to fiscal policy by an expected new Labour government.

The total value of gold coins that don’t attract capital gains sold on the Mint’s website increased by 9% during April-June from a year earlier, according to Stuart O’Reilly, market insight manager at the money producer.

“Our largest ever — multi-millions — single purchase of CGT-exempt coins by an individual occurred in late May this year,” O’Reilly said. There was a general swing in the online sales away from gold bars last quarter, he added, with the split between them and gold coins going from 50/50 to closer to two-thirds in favor of the latter in terms of money spent.

While the possibility of a capital gains hike by Labour adds to the coins’ appeal, it’s one of many potential drivers for the Mint’s increased sales. Recent reductions in the threshold at which the tax is due may play a part. Buyers are also making a bullish bet on the future spot price of gold, which hit an all-time high earlier this week. Geopolitical uncertainty also favors the precious metal as a haven asset.

The Royal Mint’s sales figures are for purchases by the general public through its website, for which 90% of customers are based in the UK. Bars and coins sold to wholesalers and retailers in the UK and worldwide are excluded from the data.

At least one other precious metals dealer saw a similar trend. Between June 1 and the July election, Merrion Gold’s UK sales of Royal Mint CGT-exempt gold and silver coins almost tripled from a year earlier, reaching £1 million ($1.3m), according to the firm’s head of trading, David Higgins.

Others still might be considering purchases too.

We have “noted a large increase in traffic to our CGT-related information pages and many more enquiries about CGT from customers,” managing director of Jewellery Quarter Bullion Ltd, Pete Walden, recently said by email.

“Clearly there are many people concerned who are starting to consider their options.”

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