Over the last 10 years or so, the Britannia has steadily overtaken the Krugerrand as the premier Gold
coin choice for investors in the UK. Today, we answer the question, why the Britannia?
1. Tax changes
All coins produced by the Royal Mint are exempt from capital gains tax in the UK, whereas other
coins and bars made by overseas mints are not. This difference becomes more important when
either the tax rate for CGT increases, or the tax free allowance before the taxable gain decreases.
In the tax year 2020-2021, one could make a gain of up to £12,300 before having to declare a taxable
gain. In the tax year 2023-2024, this allowance more than halved to £6000, meaning far more
precious metals investors were liable to a tax on their capital gain. In this current tax year
2024-2025 this CGT allowance is halving again to just £3000! So it is safe to say that the Britannia will
stay the pre-eminent bullion coin in the UK as long as the CGT exemption applies.
Tax Year Tax free allowance
22-23 £12,300
23-24 £6000
24-25 £3000
2. Increased secondary market/higher mintages
Gold saw a huge boom in the years surrounding the 2007-2008 financial crisis, and as the market
increased, so did the mintages. This has led to a much bigger secondary market for gold and silver
Britannias, which has brought the premiums down to more competitive levels.
The secondary market is crucial to gold investment as it is generally the most cost effective way to
invest in physical bullion. A bigger resale market coupled with increased competition from dealers
has brought the premium of the Britannia down to the point where it can compete with the
Krugerrand premium as well as having the all important CGT tax exemption.
3. Product improvement/security features
As mentioned, the retail gold market has increased markedly since 2007-2008 and the Royal Mint
have taken full advantage of this, constantly evolving the products offered while a lot of other world
mints have moved a lot more slowly.
2013 saw the purity of the Gold Britannia increase from .916 to .999 (from 22 carat to 24 carat) a
move which has proved very popular with gold investors, as the coin looks more lustrous and tends
to fit the idea of what people expect a coin made of gold to look like.
In addition to the change in purity, the Royal Mint has also created several security features
initially simply adding speckles to the background of the coin in 2016, then changing to
radial lines in the background in 2017, and finally to waves from 2021 (thus also creating a
nice tie-in to the old adage of Britannia ruling the waves!)
These design features not only make for a more aesthetically pleasing coin, but they also
make the coin much harder to copy. Security is a big concern for people buying gold and the
Royal Mint really hit on a unique selling point for the Britannia with this change. There is
now also a hologram that changes in the light from a trident to a padlock when tilted,
making the coin all but impossible to forge convincingly.
Verdict
The emergence of the Britannia as the pre-eminent 1oz bullion coin for UK investors is down
to a combination of tax status, design innovation and economy of sale.
We appreciate that some may want to start at a lower scale than opting for a one ounce
coin. Click here to see our guide for cost-effective, smaller scale investments – great if you
are new to the gold market, or seeking more liquidity…….
