Gold coins are one of the most popular forms of physical gold ownership. They hark back to the days when gold was used as currency, although you can’t spend a Sovereign in Starbucks anymore. So why choose gold coins over gold bars? Why choose gold coins over silver coins? Which coins offer the most investment advantages like flexibility and tax benefits? Find out here.
Gold Coins vs Gold Bars
One of the main differences between gold coins and bars is that bars are often purchased in larger denominations. While it is possible to buy very small one-gram bars, there is a fixed cost to manufacture each bar. The smaller the bar, the greater the percentage of its price is dedicated to manufacturing, which can negate the lower design costs that bars typically have over intricately designed coins.
For this reason, investors often buy bars in larger weights, but this introduces a drawback when it comes to selling. You cannot split a bar once you own it, meaning you must liquidate the entire asset at once. With the gold price continuing its upward trend, this is a significant consideration. For example, a one-kilogram cast gold bar is now worth approximately £97,600. This single asset is valued at more than the UK’s Financial Services Compensation Scheme (FSCS) deposit protection limit, which remains at £85,000 per person, per financial institution.
In contrast, the most popular gold coins range from a quarter-ounce to one ounce. This gives you far more flexibility when you choose to sell. A one-ounce Britannia gold coin’s value is based on the live gold price—which stood at £3,036.31 per troy ounce on November 7, 2025—plus a small premium. You can buy as many as you like and sell them individually as required.
While coins attract a higher premium for their design and minting, they are easy to store and benefit from high demand, making them highly liquid. Both investment-grade gold coins and bars are free from VAT. However, a crucial advantage for UK investors is that gold coins produced by The Royal Mint, such as the Britannia and Sovereign, are also exempt from Capital Gains Tax (CGT) because they are considered legal tender. Gold bars and foreign coins do not share this status and any profit on their sale above the annual CGT allowance (£3,000 for the 2025/26 tax year) is taxable.
Gold Coins vs Silver Coins
Gold and silver should not be an either/or decision; both precious metals can have a place in a balanced portfolio, but they serve different purposes. Silver is much cheaper than gold, making it an accessible entry point for new investors. However, its lower price and smaller market make it more volatile and less liquid than gold, with price swings often influenced by speculation. It tends to attract buyers seeking short-term gains rather than the slow, steady wealth preservation offered by gold.
The options for silver coins include Royal Mint-minted coins like the silver Britannia. As these are classified as UK legal tender, they are also exempt from Capital Gains Tax when sold. However, a key difference is that all investment silver, whether coins or bars, is subject to a 20% VAT charge in the UK. Investors can legally avoid this tax by purchasing and storing their silver in specialist bonded warehouses, such as those in Zurich, London, or the Cayman Islands.
New vs Old?
There are two distinct types of gold coin to consider. Bullion coins are newly minted in large volumes for investors and their value is tied closely to the spot price of gold. Numismatic coins, on the other hand, have value derived from both their gold content and their rarity, historical significance, and condition.
Numismatic coins are collectors’ pieces. Investing in them successfully requires in-depth knowledge of the market, demand trends, and grading standards. While a rare coin in excellent condition can appreciate significantly over time, the market is limited to other collectors, making them less liquid than standard bullion.
Alternative Bullion Coins
UK residents seeking to maximise tax efficiency are most likely to purchase CGT-free Sovereigns and Britannias. However, several popular international coins offer excellent purity and strong resale opportunities.
Perhaps the most iconic international gold coin is the South African Krugerrand. First minted in 1967, it contains one troy ounce of pure gold. Its enduring popularity has cemented its status, and in 2025 it has seen a surge in demand driven by record gold prices, global economic uncertainty, and inflationary pressures. The value of a one-ounce Krugerrand has increased 50-fold over the last three decades, demonstrating its powerful long-term performance.
Other highly regarded coins include the American Eagle and the Canadian Maple Leaf, which are legal tender in their respective countries. The Eagle is minted from a durable 22-carat gold alloy, while the Maple Leaf is renowned for its purity, struck from 24-carat gold. A special edition, the “Five Nines” Maple Leaf, is minted to an exceptional 99.999% purity. For investment purposes, focusing on the most popular and widely recognised coins is essential to ensure a liquid buy-back market.
The Verdict
The right gold coins for you will depend on your personal circumstances and investment goals. If you are a UK resident, the tax advantages are a primary consideration. Royal Mint coins like the Sovereign and Britannia are exempt from both VAT and Capital Gains Tax, making them the most tax-efficient choice.
The size and quantity again depend on your strategy, but the immense popularity of one-ounce bullion coins ensures there is always a strong resale market, making them a highly liquid asset. While numismatic coins can offer appreciation beyond the gold price, they require specialist knowledge and are harder to sell.
Ultimately, gold coins offer a popular, flexible, and prudent entry into precious metals. As an award-winning firm named Best Gold Broker UK 2025, we have seen first-hand how they form a vital, liquid component of a balanced portfolio, particularly in a market shaped by central bank buying and geopolitical uncertainty. To learn more about strategies for investing in physical gold, you can download our free Investor Guide.
