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FAQs – Cask Whiskey Ownership

Your questions about cask whiskey ownership, answered. If you have any other questions after reading through these and our Whiskey & Wealth Club reviews, get in touch with one of our account managers – they’ll be able to help with any queries you may have.

 


How much is the minimum cask whiskey purchase?

The minimum purchase for cask whiskey ownership depends on the types of casks we have available at any given time – please contact the team to discuss our current offerings.

On average, each cask of Irish whiskey tends to cost around €3,100 and each cask of Scotch whiskey tends to cost from £2,500 to £3,650, but this depends on the distillery who produced the cask and the particulars of the cask and spirit. When you purchase cask whiskey with Whiskey & Wealth Club, your purchase price covers the cost of the cask, the 200 litres of whiskey inside the cask (on average; casks are made by hand so not all are exactly 200 litres), and insurance and secure storage in a government bonded warehouse for five years. The whiskey’s title and ownership are registered in your name, and this full asset ownership enables you to sell (or bottle) the whiskey at any time.


How long will it be before I see a return?

The process of buying the cask itself and having the ownership transferred to you takes just a few weeks, and once you have this full ownership, you may choose to sell your casks at any time.

The rate of return can be dependent on how long you’re able to hold your casks. New make spirit cannot be called ‘whiskey’ legally until it has matured for three years, so returns generally tend to be greater from that point forward. As with any asset, value is subject to fluctuations, and your actual returns may vary.


How can I be sure cask whiskey ownership with Whiskey & Wealth Club is legitimate and safe?

All UK purchases made with us are fully insured by Aviva plc and each cask is registered with HMRC. We also complete extensive precautionary checks on all individuals and distilleries to ensure all investments are credible and authentic. Additionally, you can hear a selection of our Whiskey & Wealth Club reviews from clients and read hundreds of four- and five-star reviews we’ve received on TrustPilot.


Why should I choose cask whiskey ownership at this time?

Irish whiskey was the fastest growing spirits category of the past decade. Sales of Irish whiskey increased by 140% from 2010 to 2020, and experts predict this trend may continue. Interest in premium and luxury expressions has been a signficant driver of this increase, and the spirit has become especially popular in the US – over 4.9 million cases of the spirit were exported there in 2020!

Scotch whisky is popular around the world, and the market for single malts is growing every year. As new markets develop tastes for this premium spirit, demand is increasing and aged stocks are becoming more scarce. Rare bottles have seen significant increases in value over the last decade, and these premium expressions are likely to become even more difficult to source in the future.

Cask whiskey ownership offers the opportunity to participate in this booming market in the way that works for you – whether that’s to help a favourite distiller continue producing spirits, hedge against potential future shortages, or bottle the contents of your cask under your own marque. As with any major purchase, make sure to do your own research, learn about the industry, and undertake due diligence.


How secure is cask whiskey ownership at the moment?

As with any major purchase, there may be an associated level of risk, and returns cannot be guaranteed.

Some potential risks may include:

  • Decreases in demand and resultant decreases in price
  • Oversupply in the market
  • Natural or man-made disasters (in the instance of a warehouse fire, you would be covered by our insurance)
  • Changes in rules and regulations regarding licencing required for owners to sell their casks
  • Bans on alcohol in particular countries
  • Major global conflicts and their potential impacts on global exports

When you pay the balance on your casks, you will receive your official certificate of ownership. This is a legally binding document that confirms your full ownership of your casks. Depending on the bonded warehouse in which your casks are stored, you may also receive a bonded warehouse storage certificate for each cask number. The payment of the balance on your casks will include your storage fees; these bonded warehouse storage certificates will provide additional confirmation of this if you receive them.

In Ireland, we purchase the casks under our bonded tenancy agreement with the Irish Revenue Commissioners and the excise warehouse. We then have a legal contract in place that grants our clients full, beneficial and unencumbered ownership of each cask purchased; we simply hold them in trust under our tenancy until such a time as our clients wish to sell.


What returns can I expect?

As with any luxury asset, returns cannot be guaranteed, and the value of a cask may be subject to market fluctuations or other unforeseen major events.

The value of a cask of whiskey is primarily determined by its age, quality, and scarcity. Generally speaking, quality and scarcity together will have greater bearing on the value than age alone. While it’s likely that most casks would increase in value, casks from renowned distilleries that produce a small number of casks per year have tended to sell for much higher prices after 25 years than mass-produced, unbranded casks of the same age.

Whiskey & Wealth Club work exclusively with distillers who produce premium casks for well-known luxury brands. We’ve spent years cultivating relationships with the distillers who have made high-end whiskey what it is today to be able to offer our clients the best potential for future returns.

Rare, branded casks have historically tended to sell for greater amounts than unbranded casks of the same age; however, there is natural variance between even high-quality casks that can make it difficult to predict a particular per annum percentage by which they may increase in value.


What exit strategies do you offer?

When it comes time to exit, you’ll be able to devise the exit strategy that best fits your financial needs and goals. Whether that means selling your casks to the distillery that initially produced them, putting your casks up for auction, or bottling your casks’ contents under your own marque, Whiskey & Wealth Club team will be able to provide you with the information you need to make the right decision for you.


What duty is payable when the whiskey is released from the bonded warehouse?

Your tax situation may be unique, so we recommend discussing this with an accountant. They should be able to give you the most up-to-date and accurate advice.


Where can I view your storage facilities?

All of our casks are held in secure government bonded warehouses, but we do not have one single, central storage facility for all casks purchased through us. Your cask’s storage site will depend on the distillery that produced it, and access to the premises must be arranged well in advance. If you’re considering cask ownership with us and would like to see one of these facilities, please get in touch with one of our team. They’ll be able to let you know when the next distillery or warehouse tour is taking place, and you’ll be able to experience the facilities firsthand.


What is your expertise in this marketplace?

We were one of the first to offer cask whiskey ownership to private clients when we started trading in 2018. Our co-founders have decades of experience in business between them, and have worked tirelessly to devise the premier turnkey cask whiskey ownership experience. From securing partnerships with renowned Scottish and Irish distilleries to hand-picking an elite team of experts, we’re dedicated to excellence in every aspect of our business – and exceeding our clients’ expectations in everything we do.


Are you FCA regulated and are client purchases covered by FSCS?

The FCA does not currently regulate the wholesale buying and selling of cask whiskey in the UK.

The buying/selling of cask whiskey in the UK falls under HMRC regulation, and we are registered with HMRC through WOWGR. We have also secured our EX64, which allows us to work with international clients, and are dedicated to raising standards for compliance and regulation across the cask whiskey industry. Before accepting an individual or entity as a client, we conduct various extensive checks including Anti-Money Laundering (AML) and Know Your Customer (KYC), and we have a full in-house due diligence protocol.

We ensure we deal exclusively with reputable distilleries and excise warehouses who operate in accordance with the strict laws imposed by HMRC. Using HMRC-approved cask accounting systems, such as DRAMS, ensures no cask number can be duplicated and gives HMRC full visibility of the the whiskey as it matures, down to the location of every cask. DRAMS can even complete Government Excise Reports.

HMRC regularly conduct audits of our distilleries, and we undertake our own frequent checks of our distilleries and storage facilities to ensure that casks are held securely.


What licences do Whiskey and Wealth Club hold?

The UK has a well-established secondary whiskey market regulated by HMRC. Firms dealing in wholesale whiskey brokering must hold the appropriate licences with HMRC and undergo a rigorous application process to do secure these licences.

Most wholesale whiskey brokerages will register with HMRC through WOWGR, which stands for Warehousekeepers and Owners of Warehoused Goods Regulations. To be granted a WOWGR is to gain the trust of HMRC: HMRC exacts an excise duty on each barrel when it’s sold, and to be given a WOWGR means that you have met standards that demonstrate that these excise duties are secure and will be turned over to HMRC when the casks are sold.

Any reputable firm offering cask whiskey ownership should have a WOWGR. Securing this registration is not an easy process, but it is necessary to demonstrate that operations at every stage of the process are above board.

Whiskey & Wealth Club were one of the first in the industry to secure a WOWGR. We worked with some of the top specialists in the country, attended in-person interviews with HMRC, subjected ourselves to background checks, led officials on site visits, detailed our business plan, and finally submitted an application about the size of a phone book. And our fastidious work paid off: after eight months, we were registered with HMRC through WOWGR – and able to offer our clients an added level of security.

We’re committed to meeting the ever-increasing standards of HMRC. We’ve implemented strict protocols for the way we store information and invested over €150,000 to take our office fully paperless operation and futureproof our data storage with a custom-built CRM.


How much whiskey is left after the angel’s share?

Around 2% of the spirit inside the casks evaporates each year as part of the ‘Angel’s Share,’ so the amount of whiskey left in your cask at the end of your ownership term will depend on the duration of your term. These losses do not affect the value of your casks for insurance purposes; they are insured for the full value of your initial purchase with yearly assessments and adjustments in line with the overall increases in the value as the cask ages.


Can I pull out of cask ownership?

Once you have received your certificate of ownership, you are the full owner of your casks and may sell at any time. New make spirit must age for three years before it can legally be called ‘whiskey,’ so we generally recommend holding your casks for a minimum of three years; however, when you choose to sell your casks is ultimately up to you.


What is a bonded warehouse?

A bonded warehouse is a secure storage facility with government licence to hold goods tax-free until the goods are shipped out. This allows the warehousekeepers and managers to move goods between sites without incurring fees for each transfer. Instead, any applicable duties and taxes are deferred until the goods leave the warehouse for their final sale.

For example, when your whiskey is mature, a professional blender may purchase your casks for bottling. Once the ownership is transferred to the blender and the cask leaves the warehouse, any applicable taxes or duties will be levied.

Because of the high potential tax take from alcohol, bonded warehouses are closely monitored by the government and are among the safest of storage locations for goods.


What happens if the bonded warehouse goes out of business?

It is unlikely that the bonded warehouse where your casks are stored could go out of business; however, were it to happen, you would be able to move your cask to any of the numerous other bonded warehouses across Scotland and Ireland.


Is it possible for me to store my casks at my own property?

While it would be nice to be able to show your casks off at home, all whiskey purchased from our distillery partners must be stored in government-controlled bonded warehouses with the proper insurance. Each cask is registered with HMRC, and storing the casks in these warehouses allows any duty and tax payable to be deferred until the goods are ready to be sold or bottled. Additionally, the casks are closely monitored by experts at these facilities to ensure quality.


Which company insures your casks?

All of our casks are insured with Aviva plc. With over 33 million customers, operations in 16 countries, and an annual revenue of nearly £50 billion, they are one of the world’s largest and most trusted insurance companies.


How do I know that I have genuine ownership of my cask?

We purchase the casks under our bonded tenancy agreement with the Scottish and Irish Revenue Commissioners and our partner distilleries. We then have a legal contract in place and grant you full, beneficial, and unencumbered ownership of each cask you have purchased. We will also furnish you with a Title Deed Certificate which includes an outline of the particular casks you own.

Each cask is numbered and held in the bonded warehouse, and all cask numbers are registered with the Revenue Commissioner. We also keep our own records, as do our partner distilleries, and maintain a shared register.


What happens if there is a fire or theft?

Your casks are insured against fire and theft for their values at the time of the events, based on the insurance company’s most recent annual assessment of your casks’ values. In the unlikely event that your casks are damaged, stolen, or destroyed in a warehouse fire, your whiskey will be replaced by a cask of equal value or you will receive an insurance payout.

Whiskey warehouse fires are uncommon. As of 2018, all warehouses have up-to-date sprinkler systems installed to ensure they’re prepared in the unlikely event that a fire breaks out, and you would of course be covered for any loss or damage.

Many factors make the theft of whiskey from a bonded warehouse unlikely. First, each cask is registered with the Revenue Commissioner, so each of its moves must be accounted for and it cannot be sold without the applicable taxes being paid. Additionally, whiskey casks are heavy and require trucks and heavy machinery to be moved. With 24-hour security on duty at each bonded warehouse, a theft is unlikely to be successful; however, were a theft to occur, you would of course be covered.

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