Tag Archives: investments

Wine and capital gains tax

Wine bottlesI was chatting to a friend the other day who mentioned wine investment as a thing he’d looked into – free from capital gains and income tax as its classed as a “wasting asset”, and is on the rise due to huge interest from China (apparently) in fashionable vintages. Specific tax info here:

As well as not being liable to either income tax or capital gains tax, inheritance tax is only paid on the value of the original purchase price.

Private individual

As long as wine is held in the name of a private individual, who is not a wine dealer or trader, under current UK taxation rules, the Inland Revenue does not consider that holding a fine wine stock generates an income.

Capital gains status

Wines are also not subject to capital gains tax as the Inland Revenue considers them to be a “wasting asset”. Once again, the wine must be held by a private individual not connected to the wine trade and the definition of a “wasting asset” is an asset that’s useful life is not likely to exceed 50 years.

The choices in his case are made by investment advisers who know what they’re doing but the wine is held in your name – providing the tax relief. You could even hold the wine in your house, if you trusted yourself not to fall victim to temptation and drink the expensive vintages.

Interesting, although I feel morally dubious about it, as I do about all ‘luxury’ market items. But I guess, that’s the joy of capitalism.

Anyone doing this? Interested in perspectives.