Alternative assets such as fine wine offer investor benefits, which can de-risk and enhance the performance of investment portfolios. With a track record of
strong growth over the long term and beneficial tax treatment more investors are looking to invest in fine wine.
To see the Vin-X brochure and have a chat with Vin-X about the tax, and other, benefits of investing in wine, fill out the CONTACT FORM AT THE BOTTOM OF THE PAGE.
NOTE; Vin-X have offered Repossessed Houses For Sale website users a free case of fine wine with their first investment over £10,000. For this offer, just fill out our contact form below and you will be emailed your code.
Have a look at some of their press appearances here:
Fine Wine Investment comes under the remit of Alternative Assets. What are Alternative Assets?
‘Alternative assets’ are generally investments in assets that are not shares in listed companies or a fixed income security. This broad description of ‘alternative assets’, therefore includes tangible investments such as precious metals, fine wine, and property, and some financial assets such as venture capital, funds and trusts.
As a source of growth, ‘alternatives’ are becoming more mainstream as investors seek out better returns on investment in the current low interest rate global economy. With careful management, alternative assets can be used to diversify and strengthen portfolio performance, as they tend to perform better than traditional assets in the long term without the volatility and risk associated with financial markets.
Fine wine also falls into a group of tangible assets termed ‘Passion Assets’. These are generally viewed as luxury investments and include classic cars, art, vintage watches, coins and stamps, chinese ceramics and antique furniture. Barclays Wealth and property investment specialist, Knight Frank both publish research on investment performance in these assets.
Reasons to invest in fine wine:
- Performance – With a track record of delivering double-digit growth over the long-term, fine wine has outperformed financial markets and commodities such as gold.
- Hedge against inflation and currency devaluation – A tangible, ‘alternative‘ asset, fine wine has proven to be less volatile than financial markets and less susceptible to market downturns and adverse economic conditions. Fine wine as an asset is established as being an effective hedge against recession, inflation, currency devaluation and movement in financial markets. For example, the price of fine wine tends to increase with inflation, establishing it as a good way to preserve wealth.
- Finite supply and growing demand – The supply of investment-grade wine is extremely limited, with approximately 50 producers worldwide of wine considered to be investment-grade. In most cases vintage quality improves over time as these wines are made to age. This supply is tightly controlled and reduces as a vintage is consumed. These factors all support stable price growth over time and blue-chip investment-grade wines are under increasing global demand as new consumers enter the market. This supply / demand dynamic supports a strong, stable price performance.
- Tangible asset – Wine as a ‘real asset’ has an inherent physical value, unlike shares or bonds.
- Tax efficient – The classification of fine wine by H.M. Revenue & Customs as either a ‘wasting asset’ or ‘chattel’ generally means that Capital Gains Tax does not apply. Accordingly, any profits from investments in wine with a total value not exceeding £250,000 should be exempt. Furthermore, should the investor’s wine remain stored In Bond then VAT and Duty would also not apply. Advice should always be sought from a professional tax or financial advisor.
- Liquidity and flexibility – The fine wine market benefits from the industry trade exchange, Liv-ex.com, which can be compared to a Stock Exchange for equities, providing transparency and liquidity to the market. Whilst we encourage investors to view fine wine as a medium to long-term investment with a typical term of more than five years to optimise performance, the asset can be liquidated at a time to suit personal requirements.
- Diversification – The asset performance of alternative assets such as fine wine, which does not directly correlate with financial markets, offers value to investors in their capacity to diversify investment portfolios: