Those interested in investing in fine wines should keep an eye on
the 2011 French vintage. In fact, according to experts the only thing
that could interrupt a great harvest would be heavy storms or a plague
of locusts.
The reason for this excitement? France's miserable summer.
Wine,
unlike money, grows on trees and is therefore dependent on
environmental factors. The first step to a good investment wine is a
temperate climate. The perfect balance between sun and rain is essential
to making sure the vines grow well and produce fruit.
Drought
caused by unseasonal warm weather can cause vines to spend more energy
sending their roots down to find water, instead of creating grapes.
Hailstorms can destroy fruits by thrashing the vines.
Frost is
deadly to vines although advances in technology have made this less of a
problem in chillier wine growing regions such as Chablis. Recent freak
weather conditions in France have rightly caused concern; with some
French chefs joking that if global warming continues future fine wines
will be grown in Scotland instead.
Knowing the various effects of
weather on viticulture is a good place to start when you take your first
steps into wine investing. Monitoring the weather in wine growing
regions of France, for example, will help you to detect future vintages
which will offer a good return. You may even become confident enough to
invest en primeur: before the wine is even bottled.
Wine is a
unique asset. Unlike other luxury items, such as gold or Aston Martin
cars, the supply of fine wine is fixed. If demand for gold or Aston
Martin increases, more can be made, but fine wines have a set production
number - once the grapes are picked, no more vines can be planted, and
geographical regions are controlled by law.
Fine, investment-grade
wine is considered to be only the top 50 to 100 traded wines, although
some go further and specify that only those from chateaus in the
Bordeaux region qualify.
TAX BREAKS
Wine investment is not liable to capital gains tax (CGT), because of a tax regulation called the "Wasting asset rule". This decrees that if an asset has a life of 50 years or less no CGT is payable on it.
Wine investment is not liable to capital gains tax (CGT), because of a tax regulation called the "Wasting asset rule". This decrees that if an asset has a life of 50 years or less no CGT is payable on it.
On
top of your annual capital gains tax allowance of £10,100, there is an
added exemption for jewellery, art and antiques worth less than £6,000.
No comments:
Post a Comment