© Crown copyright 2012
This publication is licensed under the terms of the Open Government Licence v3.0 except where otherwise stated. To view this licence, visit nationalarchives.gov.uk/doc/open-government-licence/version/3 or write to the Information Policy Team, The National Archives, Kew, London TW9 4DU, or email: email@example.com.
Where we have identified any third party copyright information you will need to obtain permission from the copyright holders concerned.
This publication is available at https://www.gov.uk/government/publications/vat-notice-70121a-investment-gold-coins/vat-notice-70121a-investment-gold-coins
This notice cancels and replaces Notice 701/21A (February 2011). Details of any changes to the previous version can be found in paragraph 1.1 of this notice.
1.1 What does this notice cover?
explains that an investment gold coin is exempt from Value Added Tax (VAT) and explains which coins can be considered as investment gold coins (see section 2)
provides revised lists of investment gold coins whose supply is exempt from VAT (in section 3). Readers are advised that, because there are several changes from previous lists, they should refer directly to the lists for qualifying coins
You should read this notice alongside Notice 701/21 Gold which gives further information about dealing in gold coins.
You can access details of any changes to this notice since January 2010 on our website, go to www.hmrc.gov.uk or by phoning the VAT Helpline on Telephone: 0300 200 3700.
1.2 Who should read this notice?
Traders dealing in investment gold coins.
2. Investment gold coins
2.1 What is an investment gold coin?
An investment gold coin is:
a. gold coin minted after 1800 that:
- is of a purity of not less than 900 thousandths
- is, or has been, legal tender in its country of origin, and
- is of a description of coin that is normally sold at a price that does not exceed 180% of the open market value of the gold contained in the coin, or
b. a gold coin on the lists in section 3.
A coin not on the lists can still be exempt from VAT if it falls within the description at a. above. But you must be able to show from your business records that any such coin meets the criteria.
You should treat coins that do not fall within a. or b. above as subject to VAT at the standard rate.
2.2 Coin types
All gold coins that have the same denomination (face value), size and gold fineness as those described at paragraph 2.1 and section 3, are exempt from VAT.
The definition for VAT purposes is wider than the one which coin experts (numismatists) normally use. This is because changes of superficial design do not alter the gold coin type or description.
So, a gold coin type may be a single issue for one year, or have been produced for almost two centuries, as in the case of the British sovereign.
2.3 Selling price
Of the three criteria in paragraph 2.1a., only the selling price of the coin is subjective.
Coins are minted in various finishes and will be sold at a variety of prices. If exemption depended on the actual selling price of an individual coin this would lead to inconsistency. Administration of the exemption would become burdensome for traders and HM Revenue and Customs (HMRC) alike. For this reason, exemption depends on the normal selling price.
2.4 What is the ‘normal’ selling price?
This is the price that can most usually be demanded for a particular type of coin.
It does not matter that an individual coin is of special interest to collectors; if the usual price of the coin type falls within 180% per cent of the value of the gold contained therein, all coins of that type will be exempt.
Similarly, if a coin type is usually valued at more than 180% of the gold value, because of its interest to collectors, but an individual coin is in such poor condition that it is worth less than 180 per cent of its gold value, that coin (like others of its type), will be subject to VAT at the standard rate.
2.5 Conditions affecting the normal selling price
The finish influences the normal selling price of coins. Investment gold coins fall into two broad classes. The first consists of relatively older issues made to circulate as currency. These will normally be worn from circulation.
The second, generally more recent, are primarily produced as a store of wealth. These may have been issued in a number of finishes and if the majority of a type of coin are in for example ‘brilliant uncirculated’ condition 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 in ‘proof’ condition, then the value of the proof coin is more likely to 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.
2.6 Can I use the Margin Scheme for investment gold coins?
No. You cannot sell investment gold coins (see paragraph 2.1) under the Margin Scheme. If you have mistakenly included investment gold coins as purchases in Margin Scheme stock records, delete the entry and note it accordingly.
If you have included the coins in Global Accounting purchases, remove the items from the scheme and adjust the total purchases in the period. You must also deduct the value you have attributed to the items from your Global Accounting purchase record.
Guidance on correcting errors is in Notice 700/45 How to correct VAT errors and make adjustments or claims.
Further guidance on the Margin Scheme is in Notice 718 The VAT Margin Scheme and global accounting.
2.7 Record keeping requirements for dealers in investment gold coins
There are specific record keeping and notification rules for dealers in investment gold and investment gold coins. These are in Notice 701/21 Gold.
3. Lists of investment gold coins
The European Commission publish annually a list of gold coins which must be treated as investment gold coins in all EU Member States. The list has legal force and supplements the law.
HMRC have added an additional list of gold coins alongside the European Commission list. These are gold coins that HMRC recognise as falling within the exemption for investment gold coins. This second list does not have legal force.
These lists are valid for the year 2012. They are set in alphabetical order, by names of countries and denominations of coins. Within the same category of coins, the list follows the increasing value of the currency.
The denomination of each coin reflects the currency shown on the coins. However, where the currency on the coin is not shown in roman script, where possible its denomination in the list is shown in brackets.
Table 1: The European Commission list
Table 2: UK list of additional coins recognised as investment gold coins
Your rights and obligations
Your Charter explains what you can expect from us and what we expect from you.
Do you have any comments or suggestions?
If you have any comments or suggestions to make about this notice, please write to:
HM Revenue and Customs
VAT Financial & IPT Team
100 Parliament Street
Please note this address is not for general enquiries.
For your general enquiries please phone our Helpline Telephone: 0300 200 3700.
Putting things right
If you are unhappy with our service, please contact the person or office you have been dealing with. They will try to put things right. If you are still unhappy, they will tell you how to complain.
If you want to know more about making a complaint go to www.hmrc.gov.uk and under quick links, select Complaints and appeals.
How we use your information
HMRC is a Data Controller under the Data Protection Act 1998. We hold information for the purposes specified in our notification to the Information Commissioner, including the assessment and collection of tax and duties, the payment of benefits and the prevention and detection of crime, and may use this information for any of them.
We may get information about you from others, or we may give information to them. If we do, it will only be as the law permits to:
- check the accuracy of information
- prevent or detect crime
- protect public funds
We may check information we receive about you with what is already in our records. This can include information provided by you, as well as by others, such as other government departments or agencies and overseas tax and customs authorities. We will not give information to anyone outside HMRC unless the law permits us to do so. For more information go to www.hmrc.gov.uk and look for Data Protection Act within the Search facility.