Why You Should Invest in Premium Spirit Cask Now, Before the UK Budget
A Strategic Investment Move Before UK 2025 Budget
Disclaimer: This is not tax advice—just my personal take based on research.
With the UK Labour Party set to announce its budget on October 30th, 2024, it seems likely that some tough decisions are coming. While they’ve promised not to raise taxes on “working people” (meaning no changes to income tax, VAT, or corporation tax), there’s been plenty of speculation about other areas being targeted—pensions, Capital Gains Tax (CGT), Inheritance Tax (IHT), and possibly even a new Wealth Tax. Labour is trying to close a £22 billion fiscal gap, and as Keir Starmer mentioned in his August 27th speech, things may “get worse before they get better,” with the “broadest shoulders” expected to bear the biggest burden. More details are available on the SJP website.
For UK cask investors, there’s some good news: cask investments currently qualify for a CGT exemption since they’re considered “wasting assets.” These are assets with a lifespan of 50 years or less. Due to natural evaporation (the “angel’s share”), casks usually need to be bottled within that period to avoid significant loss of liquid, making them eligible for this exemption. You can find more information on the HMRC website.
While the government could technically remove this exemption, I think it’s unlikely, as the revenue they’d gain would be relatively small compared to other potential tax hikes. I recently spoke with Saagar Modasia, an SJP-approved wealth advisor, who agreed that the exemption is probably safe. He suggested the government might align CGT with income tax rates, meaning higher earners could pay the same rate on capital gains as they do on income, in line with Starmer’s comments about the “broadest shoulders” carrying the heaviest burden.
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If CGT rates do increase, the current exemption for cask investments could become even more valuable—assuming it remains in place. Cask investors would avoid the higher rates that might apply to other assets. It’s also worth noting that, even if the exemption were removed, tax changes are rarely applied retroactively. This means that investments made before any potential changes could still qualify for the exemption, though this is, of course, speculative.With this in mind, many of our clients are already preparing for potential changes.
To meet the growing demand, we’re launching our final tranche of 250 tequila casks ahead of the budget in early October, an increase from our usual 100 cask tranches offered in previous months. Each cask will need to be held for a three-year period to achieve extra-añejo status, after which it can be resold to a bottling brand. Based on current market data, investors can anticipate annual returns of around 15%. This exclusive offering will be limited to 25 investors, with a maximum of 25 casks per investor. If you’d like to secure a spot on the waitlist for early access, please click here.
To answer the growing demand for new investment opportunities, GORDON PWC launched its Tequila Cask Investment program.
By joining our waitlist, you can be among the first to know about our periodic cask investment opportunities