Gold Sovereign Guide
Gold Sovereign Guide
Gold Sovereign Guide
Introduction ..................................................................................................................... 2
Dimensions and Physical Specifications .................................................................. 3
Description and Design ............................................................................................. 3
Historical Sovereigns ................................................................................................. 5
Manufacturing .............................................................................................................. 7
The Sovereign as a Circulating Currency ................................................................. 9
Universal Money.......................................................................................................... 9
Tax Exemptions on Sovereigns ................................................................................. 10
EU-Wide VAT exemption ........................................................................................ 10
UK Capital Gains Tax (CGT) exemption .............................................................. 10
Why Own Gold Sovereigns ......................................................................................... 12
Contact GoldCore ................................................................................................. 13
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A Comprehensive Guide to British Gold Sovereigns
Introduction _______________________________________
It is perhaps the most recognised gold coin in the world having been produced in its
modern form since 1817 and having circulated widely as currency during the
nineteenth and early twentieth century. Remarkably, the modern sovereign has a
nearly 200 year history, but is still being produced each year by the Royal Mint in
Wales, in both bullion and proof form.
Although the size and weight of all sovereigns are standard, there are a large variety
of coin designs circulating on the market. This is understandable given that the coin
has a long history and the coin design changed with each monarch, sometimes being
updated a few times within a monarch’s reign. One-off sovereign coin designs have
also appeared at various times to celebrate royal occasions and anniversaries.
Sovereigns are finding favour with UK investors and savers today as unlike other
forms of gold investment, they are exempt from CGT.
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A Comprehensive Guide to British Gold Sovereigns
T he Sovereign is made of 22
carat gold, consisting of
11/12 gold and 1/12 copper,
giving a gold content or millesimal
fineness of 0.9167. The coin has a
standard weight of 7.98805 grams
and given that the fineness or
purity is 0.9167, the gold content is 7.323 grams, or 0.2354 (troy) ounces. The coin
has a diameter is 22.05mm. The sovereign is a legal tender coin with a face value of
one pound sterling; however the face value is not specified on the coin.
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A Comprehensive Guide to British Gold Sovereigns
On each coin the year of issue is specified underneath the St George illustration,
with Pistrucci’s initials BP in tiny letters to the right of the date.
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A Comprehensive Guide to British Gold Sovereigns
Historical Sovereigns
A gold coin called a sovereign was first produced in England in
1489 under King Henry VII, bearing the King’s effigy, hence
the name sovereigns. Sovereign production continued under
subsequent monarchs until 1604.
The Coinage Act legislation of 1816 defined the amount of gold in a sovereign and
specified the face value as one pound sterling. These specifications persist right up
to present day sovereigns. The weight of gold was determined as follows:
The Coinage Act set the value of a troy pound of 22 carat gold to be equal to £46
14s 6d, or £46.725. A 24 carat troy pound (12 troy ounces) contains 5760 grains of
gold, with a 22 carat troy pound containing 5280 grains (a grain is the smallest unit
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A Comprehensive Guide to British Gold Sovereigns
of troy weight measurement). With the sovereign having a face value of one pound
(£) sterling, £1 contains 113.0016 grains of gold (5280/46.725), which is 0.2354
ounces of fine gold. And with a troy ounce equal to 31.1034768 grams, the
sovereign thus weighs 7.987 grams. [(31.1034768 * 0.2354) * 12/11].
For ease of identification, sovereigns are commonly referred to by the name of the
monarch that they depict. The first modern sovereign in 1817, introduced in the
reign of King George III, featured the effigy of the King on the obverse and
Benedetto Pisttucci’s design of St George and the Dragon on the reverse.
Pistrucci’s design was so well liked that it has been retained on many subsequent
sovereign designs over the years, including very recent designs.
When George III died in 1820, his son George IV became King. When George IV
died in 1830 his younger brother William IV became king. When William IV died
in 1837, the next surviving heir was Victoria, a grand-daughter of George III.
Victoria reigned from 1838 to 1901. Therefore the sequence of sovereigns and the
naming convention from 1817 to 1901 is 1817 - 1820 George III, 1821 – 1830
George IV, 1831 – 1837 William IV, and 1838 – 1901 Victoria.
Given that Victoria reigned for so long, there were a number of design changes to
the Victoria portrait on sovereigns over that period. Sovereigns in the period 1838
to 1887 depict her first portrait and are referred to as Victoria young head coins.
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A Comprehensive Guide to British Gold Sovereigns
Manufacturing
Although the Royal Mint was established in 1279
The Royal Mint opened
and resided in the Tower of London, the Mint
branch mints in Australia,
moved to larger facilities on nearby Tower Hill in
India, South Africa and
1811. Thus, the first modern sovereigns minted in Canada to support local
1817 were produced at what was then, the new economies as they grew and
Tower Hill mint. Production continued in locations where major
exclusively at Tower Hill until the Royal Mint gold fields were discovered.
began to open branch mints in various locations
within the British Empire, to support local economies as they grew and in
locations where major gold fields were discovered.
In the Australian colonies of New South Wales, Victoria and Western Australia,
branch mints were established at Sydney (in 1855), Melbourne (1872) and Perth
(1899), respectively. In British India, a mint was opened in Bombay (1918). In the
dominion of the Union of South Africa, a mint was established in Pretoria (1923).
While in Canada, a mint was opened in the Canadian dominion of Ottawa (1908).
These mints were at various times involved in producing sovereigns.
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A Comprehensive Guide to British Gold Sovereigns
The Bombay mint only operated briefly between 1918 and 1919 and was
established specifically to mint sovereigns. The Sydney mint started sovereign
production in 1855 with its own design,
but switched to the London design in
1871 and produced sovereigns up until
1926. The Melbourne mint started
sovereign production in 1872 and ran
production up to 1932. Perth produced
sovereigns from 1899 to 1931, Ottawa from 1908 to 1919, and Pretoria from 1923
to 1932. The mint marks on the branch mint sovereigns are unique to each mint (S
for Sydney, M for Melbourne, P for Perth, C for Canada, I for India and SA for
Pretoria).
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A Comprehensive Guide to British Gold Sovereigns
Universal Money
Since sovereigns are widely recognised, valuable, portable and accepted as money
throughout the world, they are often issued to military personnel to be used in case
of emergency. For example the British Ministry of Defence (MoD) issued gold
sovereigns in batches of 20 to RAF aircrew and some SAS personnel during the
first Gulf War in 1991. The coins were usually then carried taped to clothing and
used if need be as part of escape and evasion manoeuvres. The MoD is known to
have purchased 60,000 sovereigns from the Bank of England in early 1991, and
then sold the coin supply back to the public in 1996.
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A Comprehensive Guide to British Gold Sovereigns
Gold sovereign purchases are exempt from value added tax (VAT) across the
European Union, and additionally, sales of sovereigns are exempt from capital
gains tax (CGT) in the UK. Therefore UK based sovereign investors can avail of
two tax benefits, the EU VAT exemption on a purchase transaction, and the UK
CGT exemption on a future sale transaction.
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A Comprehensive Guide to British Gold Sovereigns
The legal tender nature of sovereigns was again confirmed in the Coinage Act of
1971 where it stated that gold coins of five pound, two pound, sovereign (one pound
sterling face value) and half sovereign were to be legal tender for payment of any
amount.
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A Comprehensive Guide to British Gold Sovereigns
Owning sovereigns also offers the benefit of divisibility since individual coins
can be traded or gifted. This is not always possible when one owns larger gold
products.
Since modern sovereigns have been produced for nearly 200 years they have
an excellent reputation internationally and can be traded in many countries.
Gold sovereign purchases are exempt from value added tax (VAT) across the
European Union.
Sales of sovereigns are exempt from capital gains tax (CGT) in the UK.
The Treasury also check the accuracy of all newly minted Royal Mint coins,
including sovereigns, in the annual Trial of the Pyx at Goldsmiths Hall, where
each new coin is inspected by a panel of expert assayers.
Investors and savers wishing to take advantage of some of the collectable attributes
of the coin should note that many of the older bullion sovereigns are still available
to purchase in the secondary market and they trade at or near the prices of the
newer coins, i.e. with similar premiums to the spot gold price. In general,
premiums over the spot price of gold will move with supply and demand, and
larger order sizes will have lower premiums than one off purchases.
Gold sovereigns have protected individuals and families in recent years and
throughout history and will do so again in the coming years.
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A Comprehensive Guide to British Gold Sovereigns
WRITTEN BY
GoldCore
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reliable. We cannot guarantee its accuracy or completeness. It does not constitute a solicitation for the
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