Why is Investing in a Fine Whisky Cask a Safe Choice?
For a long time investing in whisky has been a popular decision for those with knowledge of our industry. This is because a cask of fine whisky can provide rather astounding returns on investment. On average we find that a cask of fine whisky has an annual return on average of 12%.
Typically the casks for first-time buyers will start at roughly £10,000. Those who are beginning to buy branded casks will spend this money on available casks that are between 8 and 10 years old. The minimum recommended time to let the whisky mature is considered to be around 5 years but some will strongly suggest at least 7 years. As the years go by the whisky will mature and become more mellow and therefore more desirable, so profits can continue to increase well past the suggested 7 years of ownership.
Often investors of cask whisky seek them out because of the tax benefits they have. For example, VAT is suspended if the whisky is in a cask. Whereas in a bottle it is often seen as a significant tax burden. Tax on scotch whisky is currently 70% but because whisky in a cask evaporates slowly it is classified as a “wasting asset”. What is lost through evaporation is minimal yet it allows this investment to be exempt from capital gains tax. In Scotland, it is even a popular practice to pass a cask on as inheritance for its tax benefits.
In fact, we have seen the top 100 Superior grade whisky brands are up over 500% over the past decade!
Working with the UKV
UKV Internation AG are brokers who specialise in the trade of wine and whisky. Their services help people looking to invest in the whisky market as they help with the acquisition of some of the rarest whisky, wine and champagne.
If you seek out help from the UKV you can effectively find casks available to purchase and then use their brokerage service when you believe you are ready to get the returns from your investment. Currently, the UKV is responsible for helping over 500 clients purchase a premium cask. It’s a service they regularly provide and have become experts at.
Additionally, because of their involvement in the brokerage service, they can help with selling the cask back to either the distillery or bottle it for sale. Through their service, you can get genuine advice based on what goals you have
What UKV International have to say
Those who work at UKV speak openly about why they think it is such an important asset in an investor’s portfolio.
Alex Presley the luxury asset consultant for UKV mentions how whisky “is a bona fide collector’s item – and a premium asset capable of providing the sort of return for your money that banks and building societies cannot offer.”
This is what Oliver O’Donovan the European sales director at UKV had to say. “Whisky is a tax-free return and it’s a better alternative investment than a classic car, for example, that can be very capital intensive and is less easily traded. We’re also likely to see a surge in demand because import duties are currently being dropped all over the world.”
Our final thoughts
If you want a tax-free return on your investment we highly suggest buying your own cask. You will find that the resale of your cask is much easier and less volatile than in other industries. When you use a company like UKV you will find a package that provides you safety against theft and damage. Even if a distillery declares bankruptcy your investment is protected since it is stored at a government-approved bonded warehouse.
UKV International AG’s primary business centres around acquiring, supplying, and selling bonded whisky.
We supply for consumption and or investment depending on our client’s requirements and offer a brokerage service for those who wish to sell investment-grade whiskey held in UK regulated bond.
We are here to assist you with choosing which whisky to invest in and to guarantee your cask is put away accurately and safely. Regardless of whether you will drink, gift or sell your whisky.
To find out more, contact us here.