If you are looking to make an investment and you are unsure which industry or market to get into, fine wines could be a great and enjoyable way to make a bit of money. As one wine aficionado has quite aptly put it – even if your wine investment doesn’t make any money, you still end up with a great wine to drink at the end of the day. If you’re unconvinced, take a look at the WAM Fine Wine Index – it frequently out-performs its bigger brothers and is becoming increasingly popular with investors around the world, particularly with new investors in China and India.
The simple fact is that if you buy wine prior to bottling, known as a ‘futures order’ or ‘en primeur’, the likelihood is that the value of the wine will rise once it hits the general market. This is not always the case, particularly if the wine was overpriced in it’s en primeur state, so it is of course important to feel confident you are investing in the right wine. A further advantage is that currently the UK government classifies wine as a ‘wasting asset’, meaning it is not subject to capital gains tax – any profits you make are entirely your own.
It is also important to remember that wine investment is long term – from the en primeur state (when the wine is maturing in vats) to the bottling stage, you may be looking at a period of two to three years. Any decent wine worth investing in should mature for a good few years after bottling, so it could be ten to fifteen years before you see any real profits on your investment. That said, if you feel you can’t wait you can sell to an agent or third party, or simply have a dinner party and indulge!
The simple fact is that if you buy wine prior to bottling, known as a ‘futures order’ or ‘en primeur’, the likelihood is that the value of the wine will rise once it hits the general market. This is not always the case, particularly if the wine was overpriced in it’s en primeur state, so it is of course important to feel confident you are investing in the right wine. A further advantage is that currently the UK government classifies wine as a ‘wasting asset’, meaning it is not subject to capital gains tax – any profits you make are entirely your own.
It is also important to remember that wine investment is long term – from the en primeur state (when the wine is maturing in vats) to the bottling stage, you may be looking at a period of two to three years. Any decent wine worth investing in should mature for a good few years after bottling, so it could be ten to fifteen years before you see any real profits on your investment. That said, if you feel you can’t wait you can sell to an agent or third party, or simply have a dinner party and indulge!