Why your investment portfolio should consider Whisky Casks for 2023

It’s no secret that we’re experiencing an economic downturn and have been for the past 18 months, following Brexit, COVID-19 and political conflicts. Therefore, investing during such an uncertain time seems quite daunting, and choosing where to invest even more so.

As a Scottish product, whisky is inherently connected to the UK market, so you’d think it would be affected by the current economic instability? Well, this is not the case.

In the 2020 Knight Frank Wealth Report, bottled rare whisky had seen an increase of 564%* in the past decade, and The Scotch Whisky Association states that Scotch whisky is the world’s number one internationally traded spirit with exports worth almost £4 billion annually. That’s around 36 bottles sent around the world from Scotland every second.

The whisky industry has never been more prosperous.

Rest assured with whisky being linked to consumer demand (which continues to increase) instead of the stock market or any other global financial system, whisky casks remain the perfect alternative to your portfolio of traditional investments such as luxury assets such as cars, watches, or stocks and premium bonds.

What are the benefits?

Owning a single malt cask of whisky is rare, whether you choose to purchase because you enjoy whisky and feel pride in seeing that certificate to a cask of your own, or to enjoy the financial benefits for years to come. It’s something you can buy yourself, or gift to loved ones that will almost certainly increase in value, during these somewhat uncertain times.

It’s also extremely versatile too, will you let it mature in taste over time and sell when the time is right? Bottle it? Drink it? It’s up to you.

Capital Gain Tax Free

Whilst your cask is stored in a warehouse, it is in ‘duty suspension’ so no VAT or excise are payable on it.

Also, as it is a wasting asset according to HMRC (due to the ‘angel’s share’ or minor evaporation that occurs to cask whisky each year) whilst in the bonded warehouse, it has the unique tax status of being capital gains tax (CGT) free so when you sell your cask for a profit you pay no tax on it.

Eliminating the stereotype

Owning a whisky cask has become an opportunity for everyone. At first, it was considered limited to those “super-wealthy”. However, over the past two decades there has been a shift in the market, opening to the wider investor population. Payment plans have become available, and with single entry level Malt Scotch whisky casks starting from £4,000 – there’s a gift option for any budget.

As a conclusion, the Scotch whisky market does not seem to be slowing down any time soon, and it’s understandable why many investors are excited about the whisky industry and where it can go in the future. As too, am I.

At MacInnes, our team is formed of experienced financial advisors and accountants, and whisky Academy qualified – with expert knowledge and unparalleled financial insight, we can help you discover the right cask and the right investment plan.

***
An article by Richard Pearce, Business Development Director at MacInnes Whisky.

Richard has worked in the Financial Industry for over 15 years.