This article represents months of research into UK and US regulations, current market practices, and the real-world experiences of sellers who’ve successfully (and sometimes unsuccessfully) sold their gold.
Selling gold differs fundamentally from selling most other assets because you’re dealing with a highly regulated commodity that attracts both legitimate dealers and opportunistic buyers.
The gold market operates under specific legal frameworks designed to prevent money laundering, tax evasion, and fraud. These rules vary between the UK and US, creating confusion for sellers trying to understand reporting thresholds, capital gains obligations, and dealer requirements. Meanwhile, the spot price of gold fluctuates daily (currently around £1,550 per troy ounce), meaning timing and market knowledge directly impact what you’ll receive.
In this guide, we’ll explore the legal rules governing gold sales in both the UK and US, including anti-money laundering requirements and dealer licensing. You’ll discover the specific reporting thresholds that trigger tax documentation in the UK (spoiler: there isn’t a simple exemption amount), understand the practical strategies that protect you from predatory buyers offering 50-70% of spot price, and learn the essential pre-sale knowledge about purity testing, weight verification, and market timing that separates savvy sellers from those who leave hundreds or thousands of pounds on the table.
I learned these lessons the expensive way back in 2009 when I sold inherited gold jewellery to a high-street buyer and received roughly 60% of what the gold was actually worth. That experience pushed me to understand not just the rules, but the tactics dealers use and the knowledge gaps they exploit. Since then, I’ve helped friends, family, and clients navigate gold sales, and I’ve seen firsthand how a bit of preparation transforms outcomes.
Rules for Selling Gold
Gold sales in the UK and US operate under anti-money laundering regulations that require dealers to verify seller identity and maintain transaction records for items over specific values. Sellers must provide photographic identification and proof of address for transactions typically exceeding £500-£1,000, whilst dealers must report suspicious activities to national financial intelligence units.
The legal framework treats gold as both a commodity and a potential vehicle for financial crime, which explains why reputable dealers ask so many questions. In the UK, the Money Laundering, Terrorist Financing and Transfer of Funds Regulations 2017 mandate that precious metals dealers conduct customer due diligence for transactions over £7,500 (though most apply checks at much lower thresholds). You’ll need to present a passport or driving licence plus a recent utility bill or bank statement.
US regulations mirror this approach through the Bank Secrecy Act, requiring dealers to file Form 8300 with the IRS for cash transactions exceeding $10,000. The term “cash” here includes physical currency, bank drafts, and money orders. What surprises many sellers is that multiple smaller transactions structured to avoid this threshold constitute “structuring,” which is itself illegal. I once watched a dealer refuse a series of £4,000 sales from the same customer over consecutive days because it triggered their anti-structuring protocols.
Dealers themselves must hold appropriate licences. In the UK, this means registration with the Financial Conduct Authority under the Money Laundering Regulations, whilst US dealers typically operate under state-level pawnbroker or precious metals dealer licences. The UK’s Financial Conduct Authority maintains a register of authorised dealers that you can check before selling. Always verify this registration, because unlicensed buyers often offer suspiciously high prices to attract sellers, then disappear or claim the gold was stolen when it comes time to pay.
The ownership documentation question catches people off guard. Whilst you don’t need receipts for small personal items like wedding rings or inherited jewellery, dealers may ask about provenance for significant quantities. They’re protecting themselves from handling stolen goods, which carries serious penalties. In my experience, a simple written statement explaining “inherited from grandmother in 2015” or “purchased from Hatton Garden jeweller in 2008” satisfies most legitimate dealers. They’re looking for plausibility, not forensic proof.
Here’s what nobody mentions: these regulations protect sellers as much as they protect the system. Dealers who follow proper procedures maintain accurate records, use certified scales, and provide detailed receipts. The ones who wave you through without ID checks are often the same ones using uncalibrated scales or “forgetting” to account for full gold weight.
UK Gold Sale Reporting Thresholds
The UK does not provide a specific exemption amount below which gold sales escape all reporting or tax obligations. Instead, capital gains tax applies to profits exceeding the annual exemption (£3,000 for 2024-25), whilst dealer reporting requirements trigger at various thresholds depending on the transaction’s characteristics and the dealer’s internal compliance procedures.
This confuses sellers because the rules operate on multiple levels simultaneously. At the tax level, you’re responsible for calculating whether your gold sale generated a capital gain exceeding your annual CGT allowance. For most people selling inherited or gifted gold, the calculation compares sale proceeds against the gold’s market value when you acquired it (either the date you received it as a gift or the date of the previous owner’s death for inherited items).
Let’s say you inherited your grandmother’s gold bracelet in 2015 when gold traded at £750 per ounce. You sell it today for £1,200 per ounce worth of gold. That gain potentially triggers CGT if it pushes you over your annual exemption. The UK’s HM Revenue & Customs provides detailed guidance on calculating capital gains from precious metals, though it’s not exactly bedtime reading.
The dealer reporting requirements operate separately. Under anti-money laundering rules, dealers must verify identity for higher-value transactions, typically starting around £500-£1,000 even though the legal threshold for full due diligence sits at £7,500. This isn’t about tax reporting to HMRC; it’s about dealers maintaining records that financial intelligence investigators can access if they suspect money laundering or terrorist financing.
I’ve sold gold in transactions ranging from £300 to £8,000, and my experience shows that every dealer above the “we buy gold” high-street shops asks for ID regardless of amount. The reputable firms start their compliance procedures at the first pound because it’s simpler than maintaining different processes for different thresholds.
| Sale Amount | ID Required | Dealer Records | CGT Consideration | HMRC Reporting |
|---|---|---|---|---|
| Under £500 | Usually yes | Basic receipt | If gain exceeds annual exemption | Seller responsibility |
| £500-£1,000 | Always | Enhanced records | If gain exceeds annual exemption | Seller responsibility |
| £1,000-£7,500 | Always | Enhanced records | If gain exceeds annual exemption | Seller responsibility |
| Over £7,500 | Always | Full due diligence + ongoing monitoring | If gain exceeds annual exemption | Seller responsibility + dealer suspicious activity monitoring |
The “no reporting” threshold that sellers ask about doesn’t exist in the way people imagine. You can’t legally sell £5,000 of gold, pocket the cash, and ignore potential tax obligations just because the amount falls below some magic number. The obligation to report capital gains to HMRC rests with you, not the dealer, and applies whenever your total gains (from all sources, not just gold) exceed the annual exemption.
What dealers report to authorities concerns anti-money laundering compliance, not your personal tax situation. They’re documenting the transaction to demonstrate they’ve followed proper procedures in verifying your identity and the gold’s legitimacy. This documentation might be requested by law enforcement investigating financial crimes, but it doesn’t automatically flow to HMRC’s tax assessment division unless the dealer files a suspicious activity report.
The practical reality? Legitimate dealers will ask for your details and keep records regardless of amount. You’re responsible for calculating and reporting any capital gains. The system assumes you’ll be honest, and HMRC’s compliance investigations catch those who aren’t through lifestyle audits and cross-referencing with other financial data (rather like how they spot people claiming jobseeker’s allowance whilst running profitable businesses).
Avoiding Predatory Gold Buyers
Predatory gold buyers typically pay between 50-70% of the spot price by using rigged scales, understating purity, applying excessive “refining fees,” or pressuring sellers into immediate decisions before they can compare offers. Protection requires testing gold independently, obtaining multiple written quotes, and understanding that reputable dealers pay 85-95% of spot price for pure gold items after accounting for legitimate processing costs.
The tactics follow predictable patterns once you know what to watch for. The first red flag is the buyer who rushes you. They’ll say things like “this price is only good for the next 30 minutes” or “gold prices are falling, so you should sell now.” This creates artificial urgency designed to prevent you from getting competing quotes. I watched a high-street buyer use this tactic on an elderly man selling his late wife’s jewellery, claiming the price would drop by “at least 10%” if he left to think about it. The man stayed, sold, and later discovered he’d received 58% of spot price when the shop three doors down would have paid 89%.
Purity manipulation is rampant. Many gold items are stamped 9ct, 14ct, 18ct, or 22ct, indicating their gold content (9ct = 37.5% gold, 18ct = 75% gold, 22ct = 91.7% gold). Predatory buyers will test your 18ct gold, acknowledge it tests as 18ct, then “re-evaluate” it as 14ct when calculating payment. They rely on sellers not knowing the conversion ratios or being too intimidated to challenge the assessment.
The solution is embarrassingly simple: get your gold independently tested before visiting buyers. Most reputable jewellers offer acid testing or XRF analysis for £10-£30, providing a written certificate stating the purity and weight. This certificate removes the buyer’s ability to misrepresent your gold’s quality. I’ve made this test a non-negotiable step after seeing a friend’s “18ct” bracelet magically become “14ct at best” at a gold-buying party, only to test as solid 18ct at a proper jeweller the following day.
Excessive fees represent another profit centre for dodgy buyers. They’ll quote something close to spot price, then deduct “refining charges” of 15-25%, “handling fees,” “assessment costs,” and “administration charges.” By the time they finish subtracting, you’re receiving 60% of spot price whilst they’ve created the illusion of transparency.
Here’s the comparison that matters. A legitimate refiner or dealer works on margins of 5-15% for gold items, accounting for actual refining costs (melting, purifying, recasting into bullion), administrative overhead, and profit. Items in better condition command higher percentages because they require less processing. So your 22ct gold sovereign in good condition might fetch 95% of its gold content value, whilst broken 9ct jewellery might bring 80-85% because it contains less gold and costs more to process.
The “gold party” phenomenon deserves special mention because it’s produced some of the worst outcomes I’ve witnessed. These events, typically hosted in someone’s home with a travelling buyer, create social pressure to sell combined with an environment where comparing offers is impossible. The host usually receives a commission on sales, creating an additional incentive to encourage selling. Prices at these parties rarely exceed 70% of spot, and I’ve documented cases as low as 45%.
Weight discrepancies offer another exploitation vector. Gold is measured in troy ounces (31.1 grams) rather than the avoirdupois ounces used for everyday items (28.35 grams). Some buyers use this confusion deliberately, weighing in standard ounces but paying in troy ounce prices, effectively shorting you about 9% before any other deductions.
Protect yourself by weighing your gold on a calibrated scale before selling. Jewellery scales accurate to 0.01 grams cost £15-£30 online and remove any ambiguity about weight. When the buyer weighs your items, watch the scale and verify the reading matches your pre-sale measurement within 0.1-0.2 grams (accounting for slight scale variations).
The absolute gold standard (excuse the pun) for avoiding ripoffs is getting written quotes from at least three buyers before committing. Reputable dealers provide written quotes valid for 24-48 hours, itemising purity, weight, spot price reference, and the percentage they’re paying. This written record eliminates the “I never said that” defence dodgy buyers employ when you question their calculations.
Pre-Sale Knowledge for Gold Sellers
Gold sellers must verify purity through independent testing, confirm weight on calibrated scales, understand current spot prices, recognize market timing factors, and distinguish between selling to refiners (highest payout for pure gold), dealers (moderate payout for jewellery), and collectors (premium prices for rare coins or antique pieces). These determinations directly impact sale proceeds by 20-50%.
The purity question sits at the foundation because it determines what you actually own. Gold purity is measured in karats (kt) or fineness. The karat system rates gold out of 24, so 24kt is pure gold, 18kt is 75% gold (18/24), 14kt is 58.3% gold, and 9kt is 37.5% gold. Fineness expresses the same thing as parts per thousand: 24kt = 999 fineness, 18kt = 750 fineness, 9kt = 375 fineness.
Your jewellery should be stamped with these markings, usually inside rings, on clasp backsides, or on the inside of bracelet ends. But here’s the problem: stamps can be fraudulent, worn away, or absent entirely on older items. I’ve personally owned an “18kt” chain that tested as gold-plated brass (worth approximately £2 instead of £200). This is why independent testing isn’t paranoia, it’s due diligence.
Three testing methods offer varying accuracy and cost. Acid testing (£10-£20) involves scratching your gold on a testing stone and applying nitric acid solutions of varying strengths. The acid’s reaction indicates purity. XRF analysis (£20-£40) uses X-ray fluorescence to determine exact composition without damaging items. Electronic testing (£15-£30) measures electrical conductivity. For items under £500, acid testing suffices. For valuable pieces, XRF analysis justifies the higher cost through precision.
Weight verification requires understanding the troy ounce system. One troy ounce equals 31.1035 grams, and spot gold prices are quoted per troy ounce. If you own 50 grams of 18kt gold, you have 37.5 grams of pure gold (50 × 0.75), which equals 1.205 troy ounces (37.5 ÷ 31.1035). At a spot price of £1,550 per troy ounce, your gold’s intrinsic value is approximately £1,868. A dealer paying 85% should offer roughly £1,588.
That calculation separates informed sellers from those who accept whatever number the buyer presents. I run this calculation on my phone calculator before entering any dealer’s premises, and I’ve walked away from multiple buyers whose offers didn’t align with reasonable percentages of my gold’s actual value.
Market timing introduces another variable that can swing your proceeds by hundreds of pounds. Gold prices fluctuate daily based on currency movements, economic uncertainty, inflation fears, and central bank policies. The spot price might be £1,550 today and £1,620 in three weeks. For large sales (over £5,000), monitoring prices for several weeks and selling during upward trends makes financial sense. For smaller sales, the transaction costs and effort of monitoring often exceed the potential gains from timing.
I use a simple rule: if I don’t need the money immediately, I set a target price based on recent highs and wait for the market to reach that level. For my last sale of £3,500 worth of gold, I waited five weeks for the price to climb from £1,485 to £1,545 per ounce, netting an extra £280 simply through patience.
The buyer type dramatically affects pricing. Refiners pay the highest percentages (90-95%) because they’re melting your gold anyway and care only about pure gold content. Jewellers and dealers pay moderate percentages (80-90%) because they might resell attractive pieces intact or must account for retail overhead. Collectors pay premium prices for rare coins, antique jewellery, or designer pieces where the item’s value exceeds its gold content.
This last category catches people off guard. I once nearly sold a Victorian gold locket to a refiner for its £340 gold value before a friend suggested consulting an antiques dealer. That dealer paid £880 because the locket’s craftsmanship, age, and condition made it collectible. The lesson: if your gold items are old, unusual, or designer-branded, get them appraised by a specialist before assuming they’re only worth their melt value.
Documentation practices separate professional sellers from casual ones. Create a simple spreadsheet listing each item, its stamped purity, tested purity (if different), weight in grams, calculated troy ounces of pure gold, and current spot price value. Photograph each item next to a ruler for scale and include any maker’s marks or distinguishing features. This documentation serves multiple purposes: it proves ownership if theft occurs, provides cost basis for CGT calculations, and demonstrates professionalism that discourages lowball offers.
Quick Reference: Gold Sale Preparation
| Preparation Step | What to Verify | Tool/Cost | Why It Matters |
|---|---|---|---|
| Purity Testing | Actual karat vs. stamped karat | Acid test £10-£20 or XRF £20-£40 | Prevents accepting prices for lower purity than you own |
| Weight Measurement | Grams and troy ounce conversion | Digital jewellery scale £15-£30 | Confirms dealer isn’t shorting weight |
| Spot Price Research | Current £/troy oz for gold | Free (Kitco, BullionVault websites) | Establishes baseline for calculating fair offers |
| Market Timing | Price trends over 2-4 weeks | Free (daily price checking) | Can increase proceeds 5-10% through patience |
The spot price research requires about 10 minutes. Websites like Kitco or BullionVault display real-time gold prices in multiple currencies. Check the price the morning you plan to sell, because dealers base their offers on that day’s opening price rather than yesterday’s close.
One final pre-sale essential: understand the difference between scrap gold and numismatic items. Scrap gold (broken jewellery, dental gold, bent chains) sells for melt value based purely on gold content. Numismatic items (coins, medals, antique jewellery) may carry premiums above gold value based on rarity, condition, historical significance, or collector demand. A gold sovereign contains roughly £350 worth of gold but might sell for £450-£500 to a coin dealer because of its numismatic value. The US Mint website provides excellent education on coin values that translates well to understanding UK gold sovereigns and other collectible pieces.
Selling gold successfully isn’t complicated, but it does require doing your homework. The sellers who get fair prices are the ones who walk in knowing their gold’s purity, weight, and current market value. The ones who get ripped off are the ones who trust the buyer to be honest when there’s profit in dishonesty.
Selling Gold: Step-by-Step Checklist
This checklist lists the steps for selling gold safely and profitably:
- Gold items must be tested independently for purity using acid testing or XRF analysis before approaching buyers.
- Weigh gold on a calibrated digital scale accurate to 0.01 grams and record measurements.
- Calculate pure gold content by multiplying total weight by purity percentage (18kt = 0.75, 14kt = 0.583, 9kt = 0.375).
- Check current spot gold price in pounds per troy ounce on the morning of sale using Kitco or BullionVault.
- Determine baseline value by dividing pure gold weight in grams by 31.1035 to get troy ounces, then multiply by spot price.
- Photograph items next to a ruler showing scale and any maker’s marks or hallmarks.
- Obtain written quotes from minimum three buyers specifying purity, weight, spot price, and percentage being paid.
- Compare offers to baseline value, expecting legitimate buyers to pay 85-95% for pure gold items.
- Verify buyer’s FCA registration on the Financial Conduct Authority website before finalizing sale.
- Request itemized written receipt showing item descriptions, weights, purity, spot price reference, and total payment before accepting payment.
Conclusion: Smart Selling Means Informed Selling
Selling gold successfully combines understanding regulatory requirements, recognizing predatory tactics, and preparing with concrete knowledge about your gold’s actual value. The difference between a disappointing sale and a fair one rarely involves luck; it involves preparation.
The rules protect both the financial system and you as a seller, even when they feel bureaucratic. Dealers who follow proper verification procedures, maintain accurate records, and provide transparent calculations almost always offer better prices than those who don’t, because they’re running legitimate businesses rather than exploiting information asymmetries.
The UK reporting threshold question misses the point. Your obligation to report capital gains to HMRC exists independently of any dealer reporting requirements, whilst dealers apply anti-money laundering checks at their discretion (usually starting far below the £7,500 legal threshold). Understanding this separation helps you approach sales with realistic expectations rather than hoping for some mythical exemption amount.
Avoiding ripoffs requires nothing more exotic than independent testing, written quotes, and basic arithmetic. The buyers paying 50-60% of spot price rely on sellers not knowing what their gold is worth. Remove that knowledge gap, and suddenly you’re comparing written offers of 85%, 87%, and 90% instead of accepting whatever number a buyer suggests.
Your action steps are straightforward: test your gold’s purity, weigh it accurately, calculate its current value, and get multiple written quotes. This foundation transforms you from someone hoping for a fair price to someone who knows exactly what fair looks like and won’t accept less.
Key Takeaways:
- Verify gold purity independently through acid or XRF testing before approaching buyers to prevent purity manipulation and ensure accurate valuation.
- Obtain written quotes from at least three buyers showing itemized calculations, expect legitimate dealers to pay 85-95% of spot price for pure gold items after accounting for processing costs.
- Calculate your own baseline value using current spot prices, accurate weights in troy ounces, and confirmed purity percentages to recognize lowball offers immediately.
FAQ: Selling Gold: Rules and Considerations
What are the legal rules for selling gold in the UK? UK gold sellers must provide photographic identification and proof of address for most transactions under the Money Laundering Regulations 2017, whilst dealers must verify identity for transactions over £7,500. Legitimate dealers register with the Financial Conduct Authority and maintain detailed transaction records for anti-money laundering compliance.
How much gold can I sell without reporting it to HMRC in the UK? No exemption amount exists below which gold sales escape all reporting obligations. Capital gains tax applies when your total annual gains (from all sources) exceed £3,000 for 2024-25, regardless of transaction size, and you’re responsible for calculating and reporting gains to HMRC.
What percentage of spot price should I expect when selling gold? Legitimate dealers typically pay 85-95% of spot price for pure gold items after accounting for refining costs, with higher percentages for items requiring less processing. Broken 9ct jewellery might fetch 80-85%, whilst 22ct gold sovereigns in good condition can reach 95% of gold content value.
How do I verify my gold’s purity before selling? Independent testing through acid tests (£10-£20), XRF analysis (£20-£40), or electronic conductivity testing (£15-£30) confirms purity regardless of stamps or markings. XRF analysis provides the most accurate results without damaging items, making it worthwhile for valuable pieces over £500.
What identification do I need to sell gold in the UK? Reputable dealers require photographic identification (passport or driving licence) plus proof of address (recent utility bill or bank statement) for transactions typically starting around £500-£1,000. This requirement stems from anti-money laundering regulations that dealers must follow.
How do predatory gold buyers manipulate prices? Predatory buyers use rigged scales, understate purity during testing, apply excessive refining fees of 15-25%, create artificial urgency to prevent comparison shopping, and exploit the difference between troy ounces and standard ounces. These tactics reduce payouts to 50-70% of actual gold value.
Should I sell gold to refiners, dealers, or collectors? Refiners pay highest percentages (90-95%) for pure gold content regardless of item condition, dealers pay moderate rates (80-90%) for standard jewellery, and collectors pay premium prices above gold value for rare coins, antique jewellery, or designer pieces with historical or aesthetic significance.
What is the difference between karats and fineness for gold purity? Karats measure gold purity out of 24 parts (18kt = 75% gold, 14kt = 58.3% gold, 9kt = 37.5% gold), whilst fineness expresses purity as parts per thousand (18kt = 750 fineness, 14kt = 583 fineness). Both systems describe the same purity using different scales.
Do I need receipts or proof of purchase to sell gold? Receipts aren’t required for small personal items like jewellery or inherited gold, though dealers may ask about provenance for significant quantities to avoid handling stolen goods. A simple written statement explaining “inherited from grandmother in 2015” or “purchased from jeweller in 2008” satisfies most legitimate dealers.
How does market timing affect gold sale proceeds? Gold spot prices fluctuate daily based on currency movements, economic uncertainty, and inflation fears, potentially varying by £50-£100 per troy ounce over several weeks. For large sales over £5,000, monitoring prices and selling during upward trends can increase proceeds by 5-10%, whilst smaller sales rarely justify the timing effort.
What documentation should I maintain when selling gold? Create a spreadsheet listing each item’s stamped purity, tested purity, weight in grams, calculated troy ounces of pure gold, and current spot price value, plus photographs showing items next to a ruler with any maker’s marks visible. This documentation proves ownership, provides cost basis for capital gains calculations, and demonstrates professionalism that discourages lowball offers.
What fees should legitimate gold dealers charge? Legitimate refiners and dealers work on margins of 5-15% to cover actual refining costs (melting, purifying, recasting), administrative overhead, and profit. Items in better condition command higher percentages because they require less processing, whilst broken or low-karat pieces cost more to refine and therefore bring lower percentages.
