This article explores the key factors which may help you determine which coin is the best investment between the Sovereign and the Britannia.
1. Price
As can probably be expected, a primary factor to consider is the price of gold.
The gold Britannia is roughly four times heavier than the gold Sovereign, weighingone Troy Ounce. As weight is a main factor in determining the price of precious metals like gold, the cost of a single Britannia is therefore higher than the cost of a single, smaller Sovereign.
For those looking to make a less significant investment at this stage, the smaller Sovereign coin ensures access to the gold market at a lower price point. However, due to the fact that the gold Britannia is bigger in size, its production cost is often lower as a percentage of the price. Therefore, investing in the Britannia would most likely mean a lower cost per gram and a higher weight of gold for your money than the gold Sovereign.
2. Range
In terms of the gold Britannia, although the occasional special edition coin has been produced, more often than not, one type of coin is mostly sold: the 1oz bullion coin featuring Philip Nathan’s famous design. Fractional versions of the Britannia are also available, enabling investors to purchase half ounce, quarter ounce and tenth ounce gold Britannia editions.
As Britannias only started being produced in 1987, the coins have a less historic and numismatic value than the Sovereign. Gold Sovereigns, however, have a greater range due to their age, and a variety of coins are available, featuring a range of monarchs within their obverse designs. This offers very interesting investment options, as whilst newer coins can be purchased with King Charles III and Queen Elizabeth II on the front, there’s also a buoyant market in relation to gold Sovereigns featuring Queen Victoria, King George and King Edward, and other previous reigning monarchs. Different weights of Sovereigns are also often available, enabling investors to not only choose the highly popular Full Sovereign, but also the Double Sovereign, Half Sovereign, and Quarter Sovereign.
3. Divisibility
In relation to investments, divisibility refers to the ease with which you can sell smaller parts of your investment when required.
Due to their difference in size, gold Sovereigns provide four times as much divisibility as the 1 troy ounce Britannia. If obtaining a modest investment portfolio of less than £10,000, then some recommend that you include a range of gold Sovereign coins to maintain optimum flexibility.
However, if you’re looking to invest a more considerable amount into the gold coin market, then you’d be most likely be able to purchase a sufficient amount of Britannias to obtain the advised level of divisibility.
4. Tax Exemptions
Simply put, both the gold Sovereign and gold Britannia are exempt from VAT at the point of purchase, as they satisfy the conditions needed to be investment grade gold.
As Sovereigns and Britannias are also legal tender within the UK, profits acquired from sales of both coins are therefore free from Capital Gains Tax (CGT).
5. Liquidity
Determining the second-hand market of any asset is very important when deciding its merit as an investment. Even if you purchase the strongest investment option in terms of capital gains relief and it’s obtained at a highly competitive cost, this won’t mean much if you can’t find a buyer when you want to sell it.
Fortunately, the Sovereign and the Britannia are highly desirable coins across the world and can be sold incredibly quickly. Their popularity within the UK is partly due to the fact that they’re tax free coins.
When it comes to worldwide coin prominence, the Sovereign is better known overall, as it has been on the market for a longer period of time. However, since 2013 the Britannia has been minted as a 24-carat coin, increasing the appeal of the coin over the 22ct Sovereign, as 24-carat investments are sometimes seen as much stronger investments.
Is it better to buy Sovereigns or Britannias?
For new investors looking to start with a smaller purchase, gold Sovereigns would possibly be a great place to begin establishing their coin investment portfolio. For those looking to concentrate on the best value gold coin for price per gram, gold Britannias could be their perfect choice. However, many investors would suggest that the best option may be to own a mixture of gold Britannia and gold Sovereign coins.
The choice of coin you invest in comes down to personal preference and the individual circ*mstances and goals of the investor. But, regardless of which gold coin you choose to invest in, both gold Britannias and gold Sovereigns are widely considered a strong and popular investment choice.
Our friendly and knowledgeable team can help answer your questions about buying and selling gold or silver. Feel free to call us on 0121 355 0620 or email us at info@atkinsonsbullion.com.
