Frequently Asked Questions: Whisky Investments

For private investors who are not actively buying and trading in scale, UK tax rules usually treat whisky as a wasting asset. As such, it is not subject to capital gains tax. Similarly, investors who buy into distillery funds are exempt from CGT unless the holding is outside an ISA (Individual Savings Account).

HMRC rules focus on chattels, i.e. personal possessions. If one single traded lot is worth more than £6,000, there may be CGT to pay on appreciation above the annual allowance of £12,300 (tax year 2020-21 figure). To optimise sale timing and minimise liability, therefore, investors who regularly trade high-value lots might want to check the position with an accountant or tax expert.

Whisky investment set-up costs are relatively low and depend on the number of bottles or type of cast=k and purchase price. Except for storage and insurance, there are no other costs.

Suppose you are considering which whisky to buy as an investment. In that case, we recommend starting with scotch as it is unmatched worldwide. The Scotch Whisky Regulations of 2009 mean that quality control is strict throughout production, thus ensuring the highest standards.

Often, collectors start by purchasing and storing bottles due to their accessibility and affordability, except exceptionally scarce whiskies. Subsequently, investors can progress to the next level: cask ownership.

Our experts will be glad to advise. Depending on the timescale envisaged, the sum available and current market conditions, our experts will strive to pinpoint the best malt whisky for clients’ investments.

Undoubtedly, the critical factor is time. Experience shows that holding a cask for at least five years is likely to yield considerably higher returns.

For peace of mind, buyers’ best advice is to deal with a reputable broker or merchant, follow industry news and seek second opinions if in doubt. Avoid anything suspicious.

Bottles can be kept in a safe storage place at home or in a dedicated facility, depending on the holding and insurance cover. Conversely, if your investment is in casked whisky, the distillery will store the maturing product in a cellar or official bonded warehouse.