Last week saw Chancellor Jeremy Hunt announce a number of tax and economic policy changes in the delayed Autumn Statement. Almost everyone in Britain saw an increase in the taxes they will pay, and support for energy bills to be reduced.
Keen-eyed investors however will also likely have spotted a key change to Capital Gains Tax that could affect bullion in the years ahead. The annual allowance for CGT will be reduced from the current threshold of £12,300, to £6,000 in April 2023, and just £3,000 a year later.
This means that for those looking to sell assets, such as company shares, antiques, property, and of course bullion, they can now make much less profit on any sale before tax becomes payable. For those investing in precious metals this would be applicable to bars and non-UK coins, and represents a significant reduction in the amount of profit that would be tax-free, particularly if combined with the sale of other assets.
UK coins with a legal tender value are exempt from CGT and will be unaffected by this change.
Many UK customers will of course have chosen UK coins produced by The Royal Mint to benefit from their exemption from Capital Gains Tax, and this benefit will now become even more appealing to those buying precious metals in the years ahead. As a reminder this includes coins like the Sovereign and Britannia, but would apply to all Royal Mint coins with a legal tender value.
The Autumn Statement otherwise has had a relatively minor impact on the UK market as a whole, with many of the announcements expected and already priced in. Sterling saw some initial gains on Friday, but is still trading around the $1.18 mark seen for much of the past fortnight. For precious metal investors then it will be the CGT change that could have the largest impact, and will likely change peoples buying habits in the years ahead, particularly if the CGT threshold remains this low in the longer term.
