In the world of investments, whiskey casks stand out as a remarkable exception. Savvy investors not only savour the rich flavours of aged spirits but also enjoy the sweet taste of tax-free returns. Unlike traditional investments, the appreciation of whiskey casks remains untouched by capital gains tax, presenting an irresistible opportunity for financial growth.
Why is it Capital Gains Tax Free?
As outlined by the HMRC in the Capital Gains Manual, in the United Kingdom, whiskey casks are classified as a "wasting asset". A wasting asset is defined as any asset with a predictable life that does not exceed 50 years.
Why is it a "wasting asset" and what is the Angel's Share?
You might now wonder why whiskey casks are considered a 'wasting asset'. The answer lies in something known as the 'Angel's Share'—the small portion of vapour that naturally evaporates as the liquid in the cask matures and breathes through the wood.
Not to worry—this evaporation is part of the natural maturation process and is actually essential for increasing the alcohol by volume (ABV) over time. In Irish climates, the 'Angel's Share' typically ranges between 0.5% and 2.0% per year. This is carefully monitored and does not diminish the value of your investment.