How is Scotch whisky made?
The quality restrictions related to Scotch whisky are extremely strict, following the Scotch Whisky Regulations of 2009. To be classed as a Scotch whisky, the new make spirit must have been fermented and distilled in Scotland, and made from malted barley, Scottish water and yeast. It is then matured in oak casks for at least three years, with the casks stored in Scotland throughout the entire maturation process. The only additive allowed is caramel. Once it has matured, the new make spirit is considered Scotch whisky. These restrictions mean you can guarantee that you are purchasing a luxury product of the highest quality, as well as preserving the unique flavour and character of Scotch whisky, which is unrivalled anywhere in the world.
What is a cask?
A ‘cask’ is the industry name for the wooden barrel that whisky is matured in. Casks come in different sizes and are usually made from American oak, coming from the US where they will have been used previously to age Bourbon whisky. It is not advised to mature Scotch whisky in brand new casks as the spirit takes on too much flavour from the wood, whereas Bourbon whiskey matures nicely in newly made casks.
Is whisky a high-risk investment?
Any investment carries an element of risk, but there are comparatively few risks when investing in casks of whisky. The main risk is that whisky declines in popularity and demand decreases. Of course, past performance does not guarantee future performance, yet this seems unlikely. As more developing nations grow their economies, we predict that demand will increase beyond current high levels. Whisky exports have consistently demonstrated strong annual growth for more than 30 years.
Where can I sell my whisky?
The whisky market is at record levels, meaning there are a wealth of opportunities globally to sell your whisky on for a profit. The blending industry, for example, is very lucrative and provides various opportunities for you to sell your matured cask whisky. In addition, a number of brokerages (including ourselves), platforms and auction houses specialise in selling whisky casks. We can advise and support you, whichever selling route you take.
Why buy whisky?
Cask whisky is a relatively new trade, as up until recently it was fairly difficult to purchase. This means it’s not a busy investment market, like bonds and equities. As a tangible asset, it also comes with greater financial security as it relies on a product rather than a company. What’s more, the whisky market is currently exempt from capital gains tax.
Is my cask insured?
Yes. Your casks will be fully insured in a government-bonded HMRC warehouse. This insurance is essential to meet the strict storage requirements of the bonded warehouse.
What do you get with a whisky cask purchase?
A cask is purchased as a package, which includes both the new make spirit and a high-quality oak cask. It may or may not include insurance and storage.
Does capital gains tax apply?
No. Whisky casks are classed by HMRC as a wasting asset, meaning they are not subject to capital gains tax when you come to sell them on.