Is Gold Exempt From Inheritance Tax?

If you are wondering whether gold is exempt from inheritance tax, you will find the answer to your question in the following article as explore the tax implications of passing on gold to loved ones as well as explore the key considerations regarding gold as a form of inheritance.

Is Gold Exempt From Inheritance Tax?

No, gold is not exempt from inheritance tax in the UK. However, there are some ways to minimise the inheritance tax liability on gold. These include the following:

• The annual exemption allows you to gift up to £3,000 worth of gold per year to each individual without incurring any inheritance tax. If you choose to gift more than this amount, the excess will be included in the value of your estate and could be subject to inheritance tax upon your death. It’s important to keep this in mind when making gifts to ensure the tax implications are properly addressed.

• Certain gold coins, specifically those produced by the Royal Mint, are immune to capital gains tax. This implies that if the coins are sold at a profit, the profit will be free of tax. However, it should be noted that these coins are not excluded from inheritance tax.

Inheritance tax (IHT) is a tax levied on the value of all the property, possessions and money left behind by a deceased person. The tax is imposed on the estate of the deceased, which is calculated by subtracting all debts from the total value of their assets.

The IHT threshold is the maximum amount of money that can be left behind without incurring any IHT. For the 2022/2023 tax year, the IHT threshold is set at £325,000. This implies that if the value of someone’s estate is less than £325,000, no IHT will be applicable. 

However, if the total value of the estate exceeds the threshold, IHT will be charged the amount that exceeds the threshold.

How Does Inheritance Tax Apply?

The Inheritance Tax applies to the estate of a deceased individual who has left behind property, money, and possessions for their immediate family members. The Executor, (usually an immediate family member), is responsible for managing the estate as per the deceased’s will, or if there is none, handing it over to legal heirs accordingly.

If the estate is valued at or above £325,000, the standard Inheritance Tax rate of 40% is levied. However, if the estate is valued below the threshold, reporting the property to HMRC may still be required. 

In cases where valuables above the threshold are left to a partner or spouse, a charity, or a community club, no Inheritance Tax will be levied. However, if the same property is left to children, the threshold increases to £500,000. 

What Are Some Important Points To Remember About Gold And Inheritance Tax?

Below are some important points to remember while considering gold and Inheritance Tax:

• Inheritance tax is a tax imposed on the estate of a deceased person and is payable if the total value of the estate exceeds the inheritance tax threshold of £325,000.
• To mitigate the impact of inheritance tax, certain exemptions and reliefs are available. These include the spouse or civil partner exemption, where transfers between married couples or civil partners are generally exempt from inheritance tax. 
• Additionally, there are reliefs for business assets, agricultural property, and charitable donations. Gold is considered a chargeable asset under inheritance tax regulations. This means that, in most cases, it is subject to taxation when included as part of an estate. 
• The legislation and rules governing gold in inheritance tax can be complex. The treatment of gold depends on various factors, including the form of gold ownership, such as physical gold, gold bullion, or gold certificates. 
• It is important to note that while gold may be subject to inheritance tax, there are certain scenarios where it may be exempt. For instance, if gold qualifies as a “wasting asset,” such as jewellery, it may be exempt from inheritance tax. However, if gold is deemed an investment asset, it will likely be subject to taxation.

Conclusion:

In conclusion, gold is generally not exempt from inheritance tax in the UK. However, its treatment depends on various factors, including the form of ownership, classification, and specific exemptions. By understanding the legislation and rules surrounding gold in inheritance tax, individuals can make informed decisions and effectively manage their estate to minimise tax liabilities.

References:

Is Gold Exempt From Inheritance Tax? | Atkinsons Bullion

Overview Of Inheritance Laws and Why Gold Is A Good Investment

How Inheritance Tax works: thresholds, rules and allowances: Overview – GOV.UK