Sooner or later comes the point at which a holding is to become money again. For a house, for a stake in a business, for the inheritance tax of the next generation, or simply because circumstances have changed.
This very step is rarely thought through when the holding is built, and that is why it usually costs more than it needs to. The obvious idea, bringing the metal home first and selling it here, is almost always the worst of the possible routes.
This page deals with the process: how a sale at the place of storage works, what it triggers for tax and how the proceeds come home cleanly. The question that comes before it, whether a sale abroad pays off for you at all and how buying prices differ, is answered in the article Selling gold abroad.
The direct sale from the vault
With proper safekeeping, you do not have to move the metal to sell it. The bars are recorded with refiner, number and weight, a buyer acquires exactly those pieces, and the allocation changes in the vault's holdings register. Physically, everything stays where it is.
That sounds unspectacular, but it saves the three most expensive items at once.
No transport. What is not moved costs no secure logistics and no transit insurance.
No import. If you bring your silver back to the UK first, that is an import from outside the UK, with import VAT at the standard rate of 20% on the full value. For a holding that lay in a bonded warehouse precisely for this reason, that one step throws the whole advantage away. Why the tax is deferred there and not waived is explained in our article on bonded warehouses in Switzerland and Liechtenstein.
No second dealer spread. The holding is sold once, not sold, transported and valued all over again.
There is one case in which things look different: when you want to hold the metal physically anyway. Then the sale is not the issue, the return journey is, and the rules we describe under Moving precious metals abroad apply in the opposite direction.
What applies for tax, and what it really hangs on
People often look for the wrong connecting factor here. Where the metal is stored does not decide your UK tax. If you are UK resident, you are normally taxed on your foreign income and gains too, and a gain on a sale in Zurich is, for tax purposes, the same transaction as one in London.
What really decides is what you sell. Gold bars and non-sterling coins such as Krugerrands are chargeable assets for capital gains tax. There is no holding period after which a gain becomes tax-free: a bar held for twenty years is taxed the same way as one held for two.
What there is, is an annual allowance: gains are tax-free up to a total of £3,000 per tax year, across all your gains together. Above it, the excess is taxed at 18% or 24%, depending on your income. Unlike a threshold that tips the whole gain into tax once crossed, only the part above the allowance is taxed.
Two points hang on this, and you should settle them before you sell:
- Coins are not all treated alike. UK legal tender gold coins, sovereigns minted from 1837 and gold Britannias, are sterling currency and therefore exempt from capital gains tax. Bars and foreign coins are not. A holding that mixes both should be sorted before the sale, not after.
- No purchase receipt, no proof of base cost. That is the most common practical mistake of all. A holding that has lain in the vault for twelve years helps you little for tax if you cannot show what you paid for it.
At the place of storage itself, in the locations we work with, no consumption tax arises on the sale of investment metal. In Singapore, investment precious metals are exempt from Goods and Services Tax, for supplies within the country as for export, and in Switzerland transactions in investment gold are exempt from tax, while silver in a bonded warehouse is under customs supervision and triggers no charges there. Which bars and coins meet the criteria in Singapore at all is drawn more narrowly than most people assume; the details are set out under Storing precious metals in Singapore.
Bringing the proceeds home
After the sale there is money abroad instead of metal, and usually it is meant to come home. That is a normal payment, with a few points worth knowing in advance.
The UK abolished its last exchange controls in October 1979. A transfer from abroad to your UK account needs no permission and no prior notice.
Three things belong with this, because they are regularly confused:
- It is not an approval procedure. Nothing is released and nothing is authorised; the money simply arrives.
- Your bank may still ask. A large incoming payment from abroad can prompt your bank to ask where it comes from. The sale statement and the purchase receipts answer that in minutes, if you have them to hand.
- The tax is a separate track. A taxable gain is reported to HMRC whether or not the money ever comes home. Transferring it changes nothing about that, and leaving it abroad does not either.
In practice this means: plan the paperwork like an appointment, not like a surprise. With several part payments, it pays to be clear beforehand which sale each one belongs to, instead of reconstructing it afterwards.
How a sale works in practice
The process is pleasingly simple, if it has been prepared.
First: gather the evidence. Dated purchase receipts, the current holdings register, proof of identity for the vault operator.
Second: compare prices, real ones. Not spot prices, but what a buyer actually pays for your specific material. The difference between two buying offers on a larger position is regularly bigger than all the storage fees of several years put together.
Third: consider a partial sale. If you do not need the whole holding, do not sell the whole holding. For tax, sales can also be spread across tax years, and with a holding bought at different times, the order is not a matter of indifference.
Fourth: settlement and payment. Re-registration in the holdings register, statement, payment. And afterwards the tax side, if your gains exceed the allowance.
Fifth: file the records. The sale statement belongs with the purchase receipts. At the latest at the next death in the family, someone will be glad that both lie together in one place. What else needs settling there is set out under Precious metals in an estate.
Which pieces you sell is no side issue
In a holding built over years, pieces with very different purchase dates and purchase prices lie side by side. If you sell only part of it, the allocation decides how large any gain turns out to be.
This is where the form of safekeeping pays off a second time. With segregated storage, every piece is recorded with refiner, number and date of receipt. You can therefore say, and prove, which bars were sold, and what each of them cost you.
Whether that identification is what counts for tax is a separate question. UK capital gains law pools assets "of a nature to be dealt in without identifying the particular assets disposed of or acquired", and whether HMRC treats your bars that way, at an average cost, or by the individual piece, is a question for your tax adviser and not for the vault operator. With pooled storage, where you are only entitled to a quantity, there is no piece-by-piece record to argue from in the first place. The difference between the two forms and what else it means is set out under Bank safe deposit box or high-security vault.
For the same reason, the tax year deserves a look. The allowance applies per tax year, from 6 April to 5 April, and to all your gains together, not per sale. If you can sell over two tax years anyway, check whether that changes anything.
And if the proceeds are to stay abroad
Not everyone wants to bring the money home. Then the question shifts instead of disappearing.
The sale turns a thing into a balance, and a balance sits in an account with an institution. From that moment, the proceeds fall under the rules for foreign accounts and no longer under those for physical metal. That is not a warning but a statement of fact: these are two different sets of rules, and the sale is the transition between them.
For tax, it changes nothing. If you are UK resident, you declare your gains regardless of which account they land in. Anyone leaving the proceeds abroad should therefore settle before the sale what they intend to do with them there, not afterwards. Which reporting and declaration duties exist around a holding abroad at all, and where the legal position is open, we have listed one by one under Do I have to report precious metals held abroad?.
The mistake we see most often
It consists of planning the exit only when you need it.
Anyone who starts dealing with buying prices, evidence and tax only at the moment money is needed sells under time pressure. Under time pressure you take the first offer, skip the comparison and give away exactly the spread for whose sake you did not want to sell the metal and buy it again in the first place.
A holding whose exit has been thought through behaves differently in a crisis from one nobody has ever looked at. The effort is one afternoon, and it is needed exactly once.
There is a second, quieter mistake in the same family: treating the holding like a savings account. Anyone who keeps selling small parts to cover running costs pays the dealer spread every time, uses up the annual allowance early, and ends up with a remainder too small for its original purpose. Precious metal carries one-off decisions well and regular withdrawals badly. If a holding has to be tapped regularly, the problem is not the route of sale but the structure of the rest of your finances.
Then there is a purely practical point you should have checked once: how quickly can your vault operator actually settle and pay out? Between "we quote the price within a day" and "we need two weeks for the re-registration" lie worlds, and the difference only shows when it is urgent. Ask before you store, not when you want to sell.
What we do
We do not trade in precious metals, we do not act as buyers and we do not broker sales. That means we sit on neither side of a price on this question.
What we do is the preparation: which part of the holding should be sold and which should not, in which order, what that triggers for tax and how the proceeds arrive cleanly. For several clients, the result in the end was not to sell at all, but to finance things differently, because the sale would have cost more than the alternative.
Friedrich A. Hennegriff works through the figures with you before you make the first call to the vault.
👉 Book an appointmentFrequently asked questions
Is selling precious metals abroad tax-free in the UK?
The place of storage does not decide that. If you are UK resident, a gain on gold bars or on non-sterling coins falls under capital gains tax wherever the sale takes place, and there is no holding period after which it becomes tax-free. Gains are taxed only above the annual allowance of £3,000, at 18% or 24%. UK legal tender gold coins, sovereigns minted from 1837 and gold Britannias, are sterling currency and exempt.
Do I need permission to bring the proceeds to the UK?
No. The UK abolished its last exchange controls in October 1979, and a transfer from abroad needs no approval. What has to be dealt with is the tax: a taxable gain is reported to HMRC. And your bank may want to see where a large incoming payment comes from, so keep the sale statement and the purchase receipts to hand.
Can I sell without moving the metal?
As a rule, yes, and that is the main advantage. With allocated storage, the bar changes owner in the holdings register and physically stays where it is. Transport, insurance and customs formalities fall away, and the customs status of the goods remains untouched.
Which records do I need?
The dated purchase receipts, because they prove your base cost, and the sale statement. Without proof of what you paid and when, you cannot show the size of your gain. These documents belong where they can still be found years later.