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Taxes

Duty

Duty is the tax on the % of pure alcohol, payable to Her Majesty's Customs and Excise. This tax must be paid if the whisky is removed from bond, for example if one is to physically take delivery of the whisky. The UK Duty rate (from 1st December 2008) for a case of 12 bottles (70cls) at 46% vol. is  £87.48 (£22.64 per litre of pure alcohol, 0.7 x 12 x 0.46 x 22.64 = 87.48). A hogshead after 10 years maturing would contain the equivalent of about 30 cases of 12 bottles (70cls) at 46% vol. The Duty rate is subject to change and is dependant on the annual Chancellor's Budget. Various different rates of Duty apply throughout the EU, and the rest of the world. UK Duty is not payable if the cask is sold back to the distillery 'under bond'.

VAT

VAT from 1st December 2008 to 31st December 2009 will be 15.0%. This is charged on the cost price of the whisky at the time of purchase, together with the duty rate prevailing at the time of removal from the bonded warehouse.  VAT is due if the cask is removed from the bonded warehouse, for example for delivery. VAT rates differ throughout the world. UK VAT is not payable if the cask is sold back to the distillery 'under bond'

Duty/VAT Suspension

If the whisky is for export out of the EU (or to a registered importer within the EU) Duty and Vat can be suspended (but not avoided) subject to the exporter  being registered for both Duty and Vat, and being registered as a bona fide exporter. Duty and Vat would be payable in the country of final destination at the rates prevailing in that country at that time. It is up to the cask owner to find a suitable importer in to his  preferred destination country, and arrange this.

Capital Gains

For UK  tax payers, UK Capital Gains Tax is not applicable as whisky is regarded as a "tangible", moveable and "wasting asset". Whisky purchased in cask for personal use, as gifts for family, godchildren and friends etc would therefore be exempt from Capital Gains Tax on realisation of the asset.