UK tax year-end: is it time to start thinking about your future?
The current tax year ends on 5 April 2023 and, if you’re one of the millions of people looking at your finances, now might be the perfect time to start thinking about the future.
Luxury items have seen a surge of interest in recent years as investors turn away from poorer-performing traditional choices like stocks and shares, bonds and ISAs.
In particular, there’s a growing thirst among shrewd investors looking for long-term gains to put their money into the finest whisky casks north of the border. And for good reason: not only do barrels get rarer as they mature (because the majority of Scotch is bottled by the time it’s 10 years old), but whisky also gets better the longer it’s left to mature.
Plus this easy-to-swallow option is classed as a wasting asset – meaning there’s no capital gains tax to be paid when you sell up.
More reasons to invest
Cask traders Vintage Acquisitions, the trading name of Brooks & Whitaker Limited, are one of the frontrunners in the market and have already helped thousands of clients get the most from their investments.
They’re seeing more interest than ever from investors inspired by some of the eye-watering whisky sales in recent years, including a single cask of Ardbeg Cask No 3 which sold for a record £16 million in July 2022.
Sam Brooks, who founded Vintage Acquisitions in 2011, says there are decent long-term gains to be had but warns potential investors to do their homework first.
“We are seeing casks double in value every five to 10 years,” he says. “Some double in value in a shorter period of time, some take slightly longer but over the last 12 years we have been trading, we’ve seen that rule of thumb to be incredibly accurate.
“There are lots of companies springing up and jumping on the bandwagon. I would advise anyone to do their research and really understand who they’re dealing with. This is a long-term play as an investment: five years as a minimum, so you really need to do your due diligence on the company that you’re speaking to and make sure you’re dealing with a longstanding company that has been around for at least five years.
“Check on Companies House, check the health of their accounts; ultimately, if they’re anything less than five years old, they might have sold a lot of whisky to their clients but they might not have exited anyone from the market yet. We exit people from the market every single day.”
Understanding the purchase process
With Vintage Acquisitions, there’s no hard sell – just honest and transparent advice. You can kick off by chatting to a member of the team about your needs and your budget, then they will match your requirements to their extensive stocklist to give you some options to consider. There are currently 141 operating Scotch whisky distilleries across Scotland and they have links with some of the best.
Once you have made up your mind, you’ll receive an invoice; once settled, you’ll be sent an ownership pack which includes the certificate of title for your cask. Your cask will be held in one of Vintage Acquisitions’ secure HMRC-licenced warehouses (or you can use a different bonded warehouse) and you’ll also be enrolled into the exclusive Vintage Whisky Club.
As a cask owner you can access updates on your portfolio via the members section of the website and enjoy tastings, sporting events and even distillery tours.
When it’s time to sell
When the time is right to sell or bottle your cask, Vintage Acquisitions can guide you through every step of exiting the market and offer six flexible options to help you make the most of your investment.
They may offer to purchase the cask directly, or they can add it to their live inventory for global clients to buy; depending on how rare your cask is, there may be an option to sell it back to the distillery.
You may choose to auction your cask, or sell it to an independent bottler – or you can bottle your whisky to share with family, friends and colleagues with the help of their sister company, Vintage Bottlers.
No capital gains tax to pay
Usually, with the exception of ISAs, all investments are subject to capital gains tax at 20 per cent. But the good news is that whisky casks are classed as a wasting asset by HMRC, meaning an asset with a predictable life of 50 years or less, and as a result there is no capital gains tax to pay.
Wooden whisky casks are naturally porous so a tiny amount evaporates every year while some is absorbed by the wood. This is known as ‘the angel’s share’ and is usually no more than 2%.
Find out more
For a free Whisky Cask Investment Guide outlining the benefits of investing in cask whisky, visit www.vintageacquisitions.com today.
This is paid-for content on behalf of Vintage Acquisitions, and does not necessarily reflect the views or advice of Peterborough Telegraph. As with all financial investments, your investment may go down as well as up, and people are recommended to take financial advice.