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Legal tender has a very narrow and technical meaning in the settlement of debts. It means that a debtor cannot successfully be sued for non-payment if they pay into court in legal tender. It does not mean that any ordinary transaction has to take place in legal tender or only within the amount denominated by the legislation.

Both parties are free to agree to accept any form of payment whether legal tender or otherwise according to their wishes. To comply with the very strict rules governing an actual legal tender it is necessary, for example, to offer the exact amount due because no change can be demanded.

All UK coins, whether circulating or non-circulating, are authorised as ‘legal tender’ by Royal Proclamation, in accordance with the Coinage Act of 1971. Legal tender allows UK coins to be accepted for payment of debts in court, but only circulating legal tender coins are designed to be spent and traded at businesses and banks.

The Royal Mint creates commemorative and bullion coin collections to celebrate key moments or individuals, and these are often treasured for their collectable and aesthetic value or purchased for investment opportunities. However, these commemorative and bullion coins will not officially enter general circulation, which means that banks and businesses are not required to accept them.

The amounts for legal tender coins throughout the United Kingdom are stated below:

£100 - for any amount

£50 - for any amount

£20 - for any amount

£5 (Crown) - for any amount

£2 - for any amount

£1 - for any amount

50p - for any amount not exceeding £10

25p (Crown) - for any amount not exceeding £10

20p - for any amount not exceeding £10

10p - for any amount not exceeding £5

5p - for any amount not exceeding £5

2p - for any amount not exceeding 20p

1p - for any amount not exceeding 20p

 

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