Investing for the future: why you should put your money into Scotch cask whisky, and how it works

With just one cask of Scotch fetching a record £16m last year, whisky is earning a rightful reputation as liquid gold.

As a result, there’s a growing thirst to invest in whisky casks that can be a great long-term option for the future: a bottle of 1926 Macallan sold for £1.5m at a London auction in October 2019.

“The market is doing very, very well at the moment across all formats,” says Sam Brooks, MD and founder of cask traders Vintage Acquisitions (trading name of Brooks and Whitaker Limited).

“Rare bottles and even not-so-rare bottles, those standard releases from the distilleries, the 12-, 15-, 18-year-olds that are more mass-produced, are seeing an upturn in value at the moment. And, of course, cask whisky – which is what we specialise in.”

Vintage Acquisitions, which was set up in 2011, buy, sell and broker whisky to market newcomers, whisky enthusiasts and experienced traders alike thanks to their direct and indirect links to some of Scotland's top distilleries which ensure they can find the best casks at the sharpest price.

And it’s a straightforward purchase process – with the promise of no hard sell. Sam's team will take time to help you to work out your price range and your preferred timescale, then select a number of suitable options for you to choose from.

You’ll receive an ownership pack including the certificate of title for your cask, then you can sit back and watch your investment mature as the years pass... and there’s the opportunity to try a wee dram along the way.

So how does the process work?

What to consider

Anyone thinking about investing in cask whisky should ensure the company they’re dealing with has the right certification to start with.

“We hold what’s called a WOWGR, a Warehouse Keeper and Owners of Warehouses Goods Regulation licence from HMRC which allows us to store spiritous beverages under bond,” explains Sam. “Anybody that is looking to put money into whisky casks should always check that the company has a WOWGR. If they don’t have one or they’re not willing to email you a copy, then I’d steer well clear.”

What happens to your cask once you’ve made your choice?

Once you have decided what you want, there are two ownership options available to you.

Option 1 - independent: You receive a delivery order for your cask(s) if you hold a private account with an HMRC approved excise warehouse. All storage, insurance and cask management costs become your responsibility from the date the delivery order is issued.

Option 2 - custodian: Your cask(s) will be stored under Vintage Acquisitions’ WOWGR licence at one of their twenty four HMRC approved excise warehouse accounts. The company becomes the custodian of the cask, but you remain the legal owner and beneficiary via the paperwork you obtain. You will receive a wet-signed and stamped certificate listing all the unique data linked to your cask(s) (its unique cask number, ABV, OLA/RLA, location and so on).

Can I visit my cask?

“In some of the bonded warehouses, you can go and visit the cask,” adds Sam. “But we are in the process of setting up our own bonded warehouse in Campbeltown at the southern tip of the Kintyre peninsula in Argyll which should be accepting casks by the middle of this year. That will store 41,500 casks of whisky when complete and there will be a tasting room so clients can come up, draw a sample themselves from their own cask and have a taste.

“Eventually there will be a bottling plant allowing clients to put their whisky into glass onsite and overnight accommodation – there are a couple of great golf courses nearby and you’ve also got Springbank distillery and Glen Scotia distillery just a few minutes’ drive away.”

How do I sell my cask on?

When the time is right to exit the market, the Vintage Acquisitions team can help you navigate the sale: Firstly, they guarantee to buy the cask back, you can also choose to sell to another buyer, go to auction to find the highest bidder or potentially sell it back to the distillery (dependant on how rare the cask is at point of sale).

Or you can opt to have your whisky bottled with their sister company, Vintage Bottlers. The amount you get will depend on the size of the cask you purchased and how much the angels have taken – a barrel is 200 litres in capacity while a hogshead is 250l in capacity and a butt is 500l.

“How much remains at the end depends on the angels’ share, which is what people in the trade call the very small amount of whisky that naturally evaporates each year or is absorbed by the wood, normally no more than 2%,” explains Sam.

“So that volume will come down marginally over time but with a 500l butt you would get 714 bottles. If it was 250l, you would get 357, and if it was 200l, it would be 285 bottles, if full”

And because whisky is classed as a wasting asset by HMRC (an asset with a predictable life of 50 years or less) then whisky casks are not subject to capital gains tax. This means you don't have to pay tax on the profit you make when you sell it on.

Want to know more?

Download your free Whisky Cask Ownership Guide at www.vintageacquisitions.com to discover more about cask whisky ownership today.

This is paid for content on behalf of Vintage Acquisitions, and does not necessarily reflect the views or advice of the Star. As with all financial investments, your investment may go down as well as up, and people are recommended to take financial advice.