For decades’ fine wine has proven to be a safe investment opportunity for investors across the world because of its chattel status or Capital Gains Tax exemption. So is wine a good investment? To date investments in vintage wine funds, in particular Super Tuscan wines and Classified Bordeaux wines has as of yet shown no losses and has outperformed most other traditional investment products.

The problem is it’s only a very narrow market with only up to 50 producers of the half a million producers worldwide that you should choose from. Growth per year has been steady with 12%-15% per annum returns. It has performed even better especially over the last few years.

What Drives Wine Profits?

Profits are driven by some main factors which include:

  • Points (parker)
  • Availability
  • Vintage (perception)
  • House Name (brand)

Before investing in fine wine, it’s best to seek professional advice first to weigh up your options and to gain valuable insight into your investment before spending too much money.

According to HMRC (http://www.hmrc.gov.uk/helpsheets/hs293.pdf) part 4:

‘A wasting asset is an asset with a predictable life of 50 years or less. Unless you have, or could have, claimed capital allowances for it, any gain on the disposal of a chattel which is a wasting asset is exempt from Capital Gains Tax’. 

Fine wine has a predictable life of 50 years or less and is regarded as a wasting asset because it is a food product. For private clients, this is true, as they tend to own their asset for less than the 50-year prediction life of the wine.

Tips To Select Your Wine Investment

Careful consideration is needed when selecting the best wine investment. When selecting wine for investment it’s important to ask these three questions:

  • When is a return required on your investment?
  • What’s the length of time you would like to invest for?
  • How much money do you have available to invest?

Contact Us Today

Fine Investing can help give you advice and insight into investing in fine wine so you can make an informed decision about which wine to choose. If you would like more information about our services, please contact us today.