Preciou returns: Is Capital Gains Tax the real dealbreaker?

SOURCE

When it comes to investing in precious metals, many stackers wonder how much influence Capital Gains Tax (CGT) should have on their choices. While tax efficiency is certainly worth considering, it’s far from the only factor that should guide your investment strategy. Let’s explore why silver—and precious metals in general—remain an attractive option, even if CGT applies.

First, let’s break down CGT. In the UK, this tax applies when you sell personal possessions for a profit exceeding £6,000*. For small-scale silver stackers, this threshold often makes CGT a non-issue. However, if your stack grows significantly, tax considerations could come into play. But does that mean you should avoid certain forms of silver entirely? Not necessarily.

For those purely focused on weight and value, silver bars are often the go-to choice. They typically carry lower premiums per gram than coins, especially when bought in larger sizes. Pre-owned bars can offer even greater value. For example, a 5kg silver bar at today’s spot price might cost £5,215 new or as little as £4,512.85 second-hand. If aesthetics and condition aren’t a priority, these bars allow you to maximise your silver holdings without overpaying.

On the other hand, coins bring more to the table than just metal value. From stunning designs to historical themes, coins appeal to collectors and enthusiasts alike. They also make excellent gifts, blending sentimentality with financial worth. While coins might carry higher premiums than bars, they often provide a unique satisfaction that pure bullion can’t match.

SOURCE

Silver’s practicality as a trading commodity adds another layer of appeal. Its lower price compared to gold makes it more versatile for barter or resale. Silver coins, in particular, are easy to trade, whether on forums, auction sites, or even in direct exchanges for goods and services. This liquidity makes silver a practical choice for those who value flexibility.

Finally, there’s the thrill of finding a bargain. Hunting for deals on silver—whether it’s discounted bars or rare coins—can be an enjoyable and rewarding experience. Many websites and sellers offer competitive prices or unique pieces, making it easy to build a diverse stack without overspending.

So, should CGT dictate your precious metal choices? Not entirely. While it’s an important factor for larger investments, smaller-scale stackers can often focus on other priorities like value, liquidity, and aesthetic appeal. By understanding your goals and being smart with your purchases, you can build a stack that balances financial sense with personal satisfaction.

GCT - Find out more abiut UK tax law at gov.uk
*Note: Tax thresholds and rates may change over time, so always consult current guidelines or seek advice from a financial professional.