When looking to exit the market, we can assist in various ways. But If you are looking for the quickest route to exit, we can sell your stock through our broad client base or make you an offer ourselves. Very quickly and very easily.
All wine is subject to Import Duty and VAT, however this is not charged whilst the wine is held under bond in a HMRC regulated warehouse.
Only if you choose to remove your wine from bond, will the Duty and VAT become payable at the current HMRC rate at that time. This is charged directly to the owner by the bonded warehouse on behalf of HMRC before the wine can be released.
So in summary, wine sold in bond is not subject to Duty or VAT unless it is removed from the warehouse
01
Many transactions by investors in fine wine could be subjected to Capital Gains Tax, unless the wines being purchased can be classed as a Wasting Asset.
For wines to be classed as Wasting Assets, they need to have an expected life at the time of purchase of no more than 50 years – this is something that has been widely written about.
HMRC are vigilant in finding particular fine wines that are regularly kept for more than 50 years. But in summary, fine wine investment is tax efficient as long as no individual case is held for longer than 50 years. By following this strict guideline we have not found any current, nor former clients to be subjected to Capital Gains Tax.
Income Tax on profits will only be applicable for individuals who are actively trading large volumes of wine with a view to make profit. Any losses however, can be offset against profits or in some cases offset against other income.
The overwhelming majority of wine investors will not be viewed as traders. In fact, unless you are a high profile individual who has publicly declared your intentions to invest in wine as a profitable pursuit, Income Tax should not be an issue.
01
Fine Wine Investment carries no special Inheritance Tax advantages.
At death the portfolio will form part of your estate at its then market value, irrespective of the original purchase cost. However, if you were considering making life time gifts with a view to making Inheritance Tax ‘Potentially Exempt Transfers’, then wine may be an ideal asset. Providing that each of the transfers fall within the ‘Wasting Asset’ exemptions, your beneficiary can still benefit from all the same tax advantages as you would have.
Other than cash, a transfer of an asset by way of gift usually gives rise to a Capital Gain. Handing down a wine portfolio and educating the next generation of fine wine enthusiasts may well be an enjoyable way of sharing time with sons, daughters and grandchildren whilst managing the value of your estate. And providing you survive seven years from the date of the transfer, the Potentially Exempt Transfer will not be subject to Inheritance Tax. If however, you were to die before the 7th anniversary of the gift, then any liability tapers on a sliding scale between years three and seven, but any growth in value in this time would be outside your estate.
