A Lucrative Tax-Free Holding

Tax-Free Investment

Storing your wine in bond means that there is no VAT or import duty to pay. We also sell all our clients’ wine in bond so there is no tax to pay on the sale. We keep a close eye on the expected maturity dates of the wine we trade so that they will always qualify as wasting assets, and therefore attract no capital gains tax.

According to the UK’s HM Revenue & Customs: “Where bottled wine is purchased, each bottle is a chattel for Capital Gains Tax purposes. As gains on the disposal of chattels which are also wasting assets are generally exempt from Capital Gains Tax, Section 45(1) Taxation of Chargeable Gains Act 1992 (TCGA), then the first question is whether bottled wine is a wasting asset or not.

“For Capital Gains Tax purposes a wasting asset is one whose predictable life, from the point of view of the person acquiring it, does not exceed 50 years, Section 44(1) TCGA. Whilst this definition would clearly apply to cheap table wine which may turn to vinegar within a relatively short period, even in unopened bottles, our view is that it would certainly not apply to port and other fortified wines which are generally recognised to have a very long storage life.

“Between these extremes, there are a number of fine wines which are quite drinkable after a substantial period although of course the taste alters over that time.”

For further guidance from a UK tax perspective, please visit HM Revenue & Customs.