Capital Gains Tax
The good news is that whisky casks are classed as a wasting asset. As such, they’re not subject to Capital Gains Tax (CGT). Even though it may be good news that your whisky cask won’t be subject to capital gains when you come to sell it, you may be wondering why your cask is classed as a wasting asset.
Casks are made from wood, which is porous. Some whisky is absorbed by the wood and some is lost to evaporation. An average of 2% of the whisky in a cask is lost each year, which is known as The Angels’ Share. Because of alcohol lost to the Angels’ Share, HMRC classifies whisky spirit in casks as wasting goods, therefore the CGT exemption applies.
Value Added Tax (VAT)
From August 1st 2023, legislation relating to the Alcohol Duty Reform subjects your cask to VAT. This would be applied and payable prior to your cask being removed or released from the warehouse for the purpose of consumption.
On any matters relating to tax, we strongly advise you to seek independent advice that you consider to be reliable and trustworthy. You may also find this link Gov.UK helpful.