Tax guide - Wine

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Tax guide - Wine

As well as not being liable to either income tax or capital gains tax, inheritance tax is only paid on the value of the original purchase price.

Private individual

As long as wine is held in the name of a private individual, who is not a wine dealer or trader, under current UK taxation rules, the Inland Revenue does not consider that holding a fine wine stock generates an income.

Capital gains status

Wines are also not subject to capital gains tax as the Inland Revenue considers them to be a "wasting asset". Once again, the wine must be held by a private individual not connected to the wine trade and the definition of a "wasting asset" is an asset that's useful life is not likely to exceed 50 years.

As most wines reach their peak of maturity between 25 and 40 years, it would be very difficult to argue that they have a useful life of over 50 years.

These conditions also apply to inheritance tax. For the purposes of inheritance tax, as long as proof of the original purchase price can be provided, the value of the wine will be based on its original cost and not an appreciating value.