Tax guidelines

Fine wine investment is subject to beneficial tax treatment by HMRC, but it is always good to know the caveats to be aware of when making your decision, as there many types of tax out there.

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What is the tax on wine investments?

If managed correctly, wine investment should in most cases be tax free. However, it is always good to know what caveats to be aware of when making your decision.

VAT

All wine is subject to VAT and Import duty, however this is not charged on wine that is already stored in a bonded warehouse. VAT and duty are only payable by the person who eventually takes the wine out of bond.

In summary, as long as a wine investor keeps all of their wine in bond, they will not pay any VAT on the purchase or the sale.

Income Tax

Income tax on fine wine only applies to individuals who actively and regularly trade at a high volume. People who trade wine this way are able to offset any losses against profits and/or any other income.

Most private wine investors will never be viewed as traders, in fact only high profile individuals who publicly declare their interest in wine will realistically need to take income tax into consideration.

Capital Gains

There are many fine wines that could be subjected to capital gains tax but there are just as many that aren’t. So long as the wine in question is classed as a wasting asset, then no capital gains tax is charged.

The term wasting asset applies to any wine that has an expected shelf life of less than 50 years, so the simple way to make sure that a wine portfolio is as tax efficient as possible is to hold on to no individual bottle or case for longer than 50 years.

Inheritance Tax

Fine Wine Investment carries no special Inheritance tax advantages but can be used as part of a potentially exempt transfer. This means that if the wine portfolio is handed over at least seven years before your death, the beneficiary receives the same tax advantages that you would have.

The tax rate on potentially exempt transfers works on a sliding scale that begins with thirty two percent being liable after year three and ends with zero percent being liable after year seven.

Please note that we are not tax advisors, so always seek professional tax advice when required.

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Why choose Vinverum?

Invest with confidence.

Tailored service

Hands on or hands off, active or armchair – Whatever kind of investor you are, we will tailor our service making your wine investment fit around you and your requirements.

Regulated bonded storage

We store exclusively with government regulated bonded warehouses within the U.K and Bordeaux – all of which provide full insurance to market value.

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Our membership gives us access to a global network of reputable buyers and sellers, meaning that we can both buy and sell on behalf of our clients with ease.

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