Capital Gains Tax (CGT) is a tax on the profit when you sell something that’s increased in value. This has to be paid from any profit you make that is larger than the allowance 12,300 £ (HMRC.)

All coins produced by the Royal Mint that qualify as British legal currency are exempt from Capital Gains Tax.

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Investment gold is actually a legal term in the UK.

According to HMRC investment gold is either:

(a) gold of a purity not less than 995 thousandths that is in the form of a bar, or a wafer, of a weight accepted by the bullion markets

(b) a gold coin minted after 1800 that is:

• of a purity of not less than 900 thousandths
• or has been, legal tender in its country of origin
• of a description of coin that is normally sold at a price that does not exceed 180 per cent of the open market value of the gold contained in the coin

The reason why this is important is that investment gold is exempt from VAT which makes it an attractive investment product.

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Although the weight of gold and silver is sometimes quoted in kilograms or grams, the official weight measurement to gauge the mass of precious metals is the troy ounce. One troy ounce (oz) equals 31.1034768 grams. Note that a troy ounce is not the same as an avoirdupois ounce (more commonly known as the kitchen ounce) which equals approximately 28.34 grams.

The purity of gold and silver is measured in millesimal fineness, which denotes the purity of the metal in parts per thousand. For example, the PAMP 100 gram gold bar contains a gold fineness of 999.9, which means that the bar is 99.99% pure gold. Another example, the $20 Double Eagle with a gross weight of 33.43624 grams contains a gold fineness of 900, which denotes a gold purity of 90% or 33.43 x 0.9 = 30.092 grams of pure gold.

In addition to fineness, the traditional purity measurement of gold is the karat (K). The highest karat rating is 24 and this equals or is greater than 99.9% pure gold. Gold jewellery in Europe most often contains a gold purity of 14 and 18 karats, which equals 14/24 = 58.3% and 18/24 = 75% pure gold respectively.