Gold coins or bars – Which is better to invest in?

Gold coins or bars – Which is better to invest in?

Here at UK Bullion we stock a wide range of Gold Coins and Bars. The range of products that we stock often leads to the question; Gold coins or bars – Which is better to invest in? Investors naturally want to maximise their investment and get the most for their money. Both coins and bars have their advantages for different types of investors and therefore the overall answer of which is the best option is not as clear cut as you would imagine.

Gold coins have several favourable attributes including being struck in more limited quantities, you’ve probably seen examples of this from mints around the world that produce limited edition yearly coins or special lunar calendar coins. Now some mints are even offering coins in unusual shapes to tempt investors. This of course adds an element of collect-ability and may in time provide additional value although this is not certain.

In addition to this certain coins, such as the Gold Sovereign in the UK are classed as legal tender and as such are exempt from capital gains tax which can prove an appealing attribute for investors.

Finally some coins are available that have historic value, we spoke recently about the oldest gold coins and treasure found in the world and these coins are undoubtedly more valuable due to their age rather than the weight of precious metal. The rarity of historic coins puts them more towards the collectors markets and somewhat less suitable for investment purposes.

There is far more variety available in weights of Gold Bars. The smallest bar generally available is 1 gram and weights increase in logical increments up to around 1kg where the value of a single bar is becoming impractical for all but the wealthiest investors. Bars give flexibility as several small Gold Bar purchases will make up the value of a single Gold Coin, depending of course on the exact products purchased. Bars however are not exempt from Capital gains tax as they are not struck as legal tender.

Both Investment Gold Coins and Investment Gold Bars benefit from a special status in the UK which means that they are exempt from VAT, saving a potential 20% addition to the price paid. A well planned mix of coins and bars to suit an investor’s needs allows for the greatest flexibility in the future should the need to release funds arise.
It is worth remembering that each product that you buy will most likely have a small built in charge from the manufacturer. This is known as a fashion charge and covers the costs of production and any decorative packaging to display or protect the coin or bar.

As always, check our Learning Centre for more information and articles discussing these concepts and remember that each individual product’s tax status is included and displayed clearly on our product pages to help inform your decision.


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