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What the UK Budget Means for Whisky Collectors
With whisky collecting becoming a sought-after avenue for wealth preservation and growth, the recent Budget 2024 brings key updates that whisky collectors should consider for maximising returns. Here’s a breakdown of the most relevant points:
1. Capital Gains Tax (CGT) Increase
What’s Changed: The capital gains tax on profits from assets like shares will increase from up to 20% to up to 24%. However, whisky stands out as one of the few alternative assets exempt from CGT.
Implication for Collectors: For our clients, the CGT exemption on whisky sales provides a unique advantage, allowing collectors to keep more of their returns compared to traditional assets now facing higher CGT rates. This tax-free status solidifies whisky as a lucrative and tax-efficient collection choice, particularly in a landscape where other assets face increased taxation.
2. Alcohol Tax Increase (Non-Draught)
What’s Changed: Taxes on non-draught alcoholic drinks, like bottled whisky, will increase with inflation based on the Retail Price Index (RPI) measure, likely driving up retail prices.
Implication for Collectors: Rising retail prices can strengthen the value of cask-aged whisky collections, as increased demand and pricing in the bottle market may further enhance cask value. For our clients, this trend could mean an appreciation in the worth of existing collections, positioning whisky as a resilient asset amid inflation-driven price hikes.
3. Inheritance Tax Threshold Freeze
What’s Changed: The inheritance tax (IHT) thresholds are frozen until 2030, potentially affecting more estates as asset values grow.
Implication for Collectors: Whisky can serve as a strategic asset in a diversified portfolio with potentially lower tax implications. For collectors, this tax efficiency makes whisky a compelling addition to estates, especially as other assets may face heightened IHT exposure.
The 2024 Budget reinforces whisky’s exceptional status as a CGT-free collection option, enabling our clients to maximise value in a tax-efficient, high-demand asset class. For collectors, this moment highlights whisky’s distinctive place in the market, offering both growth and tax advantages that other assets currently cannot match.
Get in touch today to start your whisky journey.
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