Gold Coins vs Bars: What UK Buyers Should Understand
Both gold coins and gold bars are common ways to own physical gold, but they differ in practical ways that matter to UK buyers. This page explains the key differences to help you understand your options.
Quick Overview
Gold coins and gold bars both contain gold and are both considered "bullion," but they differ in several practical respects:
Gold Coins
- • Widely recognised and easily verified
- • Generally higher premiums over spot
- • More divisible (can sell one coin at a time)
- • UK legal tender coins may have CGT advantages
Gold Bars
- • Typically lower premiums per gram/ounce
- • More efficient for larger purchases
- • Less divisible than coins
- • May require more verification when selling
Note: This page provides general educational information only. It does not constitute investment, tax, or financial advice. Individual circumstances vary, and you should conduct your own research before making any purchase.
Gold Coins (UK Context)
Common Examples
The most commonly purchased gold coins among UK buyers include:
- Gold Sovereigns: A historic British coin containing approximately 0.2354 troy ounces (7.32g) of gold at 22 carat (91.67% purity). Sovereigns are compact, widely recognised, and have been minted for over 200 years.
- Gold Britannias: A modern bullion coin from The Royal Mint, containing exactly one troy ounce of 24 carat (99.99% pure) gold. Available in fractional sizes (1/2oz, 1/4oz, 1/10oz) as well.
- International coins: South African Krugerrands, Canadian Maple Leafs, American Gold Eagles, and Austrian Philharmonics are also commonly available from UK dealers.
Recognition and Liquidity
Well-known gold coins from major mints are instantly recognisable to dealers and collectors worldwide. This recognition generally makes them straightforward to sell. A Gold Britannia or Sovereign can typically be sold to any reputable UK bullion dealer without difficulty, often with minimal verification required.
Coins also offer divisibility: if you own ten sovereigns and need to raise a smaller sum, you can sell one or two without liquidating your entire holding.
CGT Considerations
Gold Britannias and Gold Sovereigns are UK legal tender. As such, they are commonly understood to be exempt from Capital Gains Tax (CGT) on any profit when sold. This is often cited as a significant advantage over gold bars, which do not share this exemption.
However, tax rules can be complex and subject to change. If CGT treatment is an important factor in your decision, it is advisable to verify the current position with HMRC or a qualified tax professional. For more on tax matters, see ourVAT and Tax guide.
Premiums and Resale
Gold coins typically carry higher premiums over the spot price than bars of equivalent weight. This reflects the higher manufacturing costs involved in striking coins with intricate designs. Fractional coins (smaller than 1oz) have proportionally higher premiums still.
When selling, well-known coins generally command competitive buyback prices from dealers. The spread (difference between buy and sell prices) tends to be narrower for recognised coins than for lesser-known products.
Gold Bars (UK Context)
Common Sizes
Gold bars are available in a wide range of sizes, from 1 gram to 1 kilogram (and larger for institutional buyers). Common sizes for private buyers in the UK include:
- 1g, 5g, 10g, 20g (smaller bars, higher premiums per gram)
- 1oz (31.1g) – a popular standard size
- 50g, 100g (medium bars)
- 250g, 500g, 1kg (larger bars, lower premiums per gram)
Bars from LBMA-accredited refiners (such as PAMP, Valcambi, Heraeus, and Umicore) are generally preferred, as they are widely recognised and easier to sell.
Lower Premiums per Gram
The main advantage of gold bars is typically their lower premium over the spot price. Because bars are simpler to manufacture than intricately designed coins, the fabrication cost is lower. This is especially true for larger bars: a 100g bar will generally have a lower premium (as a percentage) than the equivalent weight in 1oz coins.
For buyers primarily focused on acquiring gold at the lowest cost per gram, bars often represent better value than coins.
Storage and Verification
Bars are compact and stack efficiently, which can be an advantage for storage. However, larger bars may require more robust security arrangements.
When selling bars, particularly larger ones, dealers may want to verify authenticity more thoroughly than for well-known coins. Bars from recognised refiners with serial numbers and assay certificates are easier to sell. Keeping bars in their original tamper-evident packaging can help maintain confidence in their integrity.
VAT Position
Gold bars that meet the "investment gold" criteria (purity of at least 995 parts per thousand) are VAT-exempt in the UK, just like qualifying gold coins. The VAT treatment is the same for both forms, so this is not a distinguishing factor between coins and bars.
Practical Comparison: Coins vs Bars
| Factor | Coins | Bars |
|---|---|---|
| Liquidity | Generally high for well-known coins. Easy to sell to most dealers. | Good for bars from recognised refiners. May require more verification for larger bars. |
| Premiums | Higher premiums, especially for fractional sizes. | Lower premiums, especially for larger bars. |
| Spreads | Often narrower for well-known coins. | Can be wider, particularly for less common bars. |
| Storage | Slightly bulkier per unit of value. Tubes and capsules add volume. | More compact. Bars stack efficiently. |
| Verification | Easier to verify visually. Distinctive designs, weights, and dimensions. | May require more checks, especially for larger bars. Serial numbers and certificates help. |
| Flexibility | High. Can sell individual coins as needed. | Lower. Cannot sell part of a bar. |
| CGT (UK) | UK legal tender coins (Britannias, Sovereigns) commonly understood to be CGT-exempt. | Generally subject to CGT on gains above the annual allowance. |
Neither coins nor bars are inherently "better" – they simply have different characteristics. Many buyers hold both, using coins for flexibility and potential tax advantages, and bars for cost efficiency on larger purchases.
How UK Buyers Often Decide in Practice
There is no universal formula for choosing between coins and bars. Different buyers prioritise different factors. Here are some common considerations:
Smaller budgets may naturally favour sovereigns (fractional gold) or small bars. Larger budgets can take advantage of lower premiums on bigger bars or bulk coin purchases.
If storage space is limited or you prefer compactness, bars may be more practical. If you value the ability to sell in smaller increments, coins offer more flexibility.
Buyers who anticipate gains above the CGT allowance may prefer UK legal tender coins for their potential tax advantages. Those unconcerned with CGT (or with gains within the allowance) may prioritise lower premiums.
Coins from major mints are straightforward: buy, store, sell. Bars can be more cost-efficient but may involve slightly more complexity around verification and selling, particularly for larger sizes.
If you anticipate selling in stages over time, coins provide natural divisibility. If you expect to sell everything at once, bars' lower premiums may make more sense.
Frequently Asked Questions
Are gold coins easier to sell than bars?
Well-known coins (such as Britannias, Sovereigns, and Maple Leafs) are generally easy to sell because they are instantly recognisable. Bars from reputable refiners are also straightforward to sell, though larger bars may require more verification. In practice, both can be sold to UK dealers without difficulty, but coins may involve a slightly smoother process.
Do bars always have lower premiums?
Not always, but generally yes – especially for larger bars. A 100g bar will typically have a lower premium (as a percentage of the gold value) than ten 1oz coins. However, very small bars (1g, 5g) can have high premiums, sometimes higher than coins of equivalent weight. The relationship between size and premium is more important than the coin/bar distinction itself.
Are gold coins safer to buy than bars?
Coins from major mints have precise specifications and intricate designs that make them harder to counterfeit convincingly. Bars, particularly larger ones, can be targeted by sophisticated counterfeiters (e.g., tungsten-core fakes). However, buying from reputable UK dealers largely mitigates these risks for both coins and bars. Neither is inherently "unsafe" when purchased from established sources.
Do I pay VAT on gold bars?
No, provided the bars qualify as "investment gold" (purity of at least 995 parts per thousand, or 99.5%). Most investment-grade gold bars from UK dealers meet this standard and are VAT-exempt. The VAT treatment is the same for qualifying coins and bars.
Can bars be CGT-free?
Gold bars are generally not CGT-exempt. The exemption commonly attributed to UK legal tender coins (Britannias, Sovereigns) does not apply to bars. If you sell gold bars for a profit exceeding your annual CGT allowance, you may owe CGT on the gain. Tax rules can change, so consult HMRC guidance or a tax professional for current information.
Which is better for a first-time buyer?
There is no single "best" choice. Many first-time buyers start with sovereigns or 1oz Britannias because they are well-known, straightforward, and offer a balance of flexibility and value. Others prefer the efficiency of bars. Consider your budget, storage situation, and priorities before deciding. For a broader overview of product options, see our guide on what gold and silver products people buy.
Can I mix coins and bars in my holdings?
Yes, and many buyers do. A common approach is to hold coins for flexibility and potential CGT benefits, while using larger bars to add gold at lower premiums. There is no requirement to choose one or the other exclusively.
Do dealers prefer to buy back coins or bars?
Most dealers will buy back both, though preferences can vary. Well-known coins and bars from LBMA-accredited refiners are generally in demand. Lesser-known products may attract lower offers. When buying, consider whether the product is likely to be easy to sell later.
Are fractional coins worth the higher premium?
It depends on your priorities. Fractional coins (1/2oz, 1/4oz, 1/10oz) carry higher premiums but offer lower entry points and greater divisibility. If flexibility matters more than cost efficiency, the premium may be worthwhile. If minimising premium is your priority, larger coins or bars make more sense.
What about silver coins vs silver bars?
Similar principles apply, though with the added factor of VAT: silver is subject to 20% VAT in the UK regardless of form. Coins tend to have higher premiums than bars, but the VAT impact is the same for both. For more on silver specifically, see our What to Buy guide.
Important Notice
This page provides general educational information about gold coins and bars. It does not constitute investment, tax, or financial advice. The value of gold can go down as well as up. Tax treatment depends on individual circumstances and may change. Before making purchase decisions, conduct your own research and, where appropriate, seek professional advice.