No. In the UK, HMRC (HM Revenue and Customs) regulates the buying and selling of cask whisky.
Hackstons ensures that we are compliant to as many of the FCA’s regulations as possible, conducting various anti-money laundering checks (AMLs) and ensuring our customers will not be put at financial risk through Know Your Customer checks (KYCs). Our compliance team will carry out these reviews before you are able to purchase any scotch cask for investment.
Every time a cask is moved to a different warehouse or the owner of record is changed, the HMRC accredited cask storage warehouse uses a document called a Delivery Order, often simply referred to as a ‘D.O.’ or ‘DO’, as a receipt that documents the transaction. Delivery orders vary in appearance from warehouse to warehouse, but must include the warehouse letterhead, details of the transaction and a signature from the warehouse keeper.
While the Delivery Order is simple in presentation, there are requirements which must be met before the transfer can be completed and the document issued. The first requirement is that the owner must possess a WOWGR certification (Warehousekeepers and Owners of Warehoused Goods Regulations) or, for buyers outside the UK, engage a duty representative. The second requirement is that the buyer must open an account at the scotch storage warehouse, which can be approved or denied based on the procedures put in place by the warehouse for new accounts.
This is why the market was previously inaccessible to private investors. Scotch whisky brokerages like Hackstons can help to get past these barriers for entry through our Portfolio Management Model.
Yes, if you enter the market on your own.
No, if you work alongside a tangible assets broker.
It is worth noting that there is an exception for the WOWGR certification for individual buyers, but there is uncertainty surrounding the limitations as to the number of casks that can be owned in order to comply (HMRC has not provided clear guidance on the exception). But, more importantly, nearly every warehouse in Scotland will no longer open accounts for individuals unless they possess a WOWGR or duty representative. In addition, due to the expansion of the industry, most warehouses are only looking to establish new accounts for buyers who own a sizeable number of casks.
The majority of warehouses don’t accommodate individuals who might only own a few casks, instead they want to open corporate accounts with hundreds or thousands of casks. This has made it more challenging for most individual whisky investors to be able to meet the requirements necessary for a Delivery Order to be issued directly.
However, there is an alternative for private investors looking to gain entry to the lucrative whisky cask investment market, such as working with a scotch whisky brokerage such as Hackstons.
Hackstons offer the Portfolio Management model, which facilitates whisky cask investment for private individuals, allowing them to build their portfolio without the regulatory headaches and legal obstacles that have been put into place to protect the scotch whisky investment market.
Through Portfolio Management, all client casks are stored in a corporate account, which means there is no need to obtain a WOWGR or negotiate individually with a bonded warehouse.
When a cask is purchased through our Whisky Portfolio Management programme, investors are provided with a certificate of ownership that gives them complete control over that cask, in effect the client becomes the UBO (Ultimate Beneficial Owner). That means they can choose to re-rack their cask (remove it from one cask and fill another), re-gauge it (check its ABV), bottle it, or sell it on to another investor whenever they feel the time is right.
Under this whisky ownership model, all casks are stored in a warehouse or at distilleries, dedicated to warehousing investor casks. That means whisky investors know where the cask resides and can trust that their investment is in safe hands for the entire lifetime of its maturation. And, of course, they are welcome to visit the cask whenever they like using their unique cask numbers to identify their cask.
After purchasing a cask, a number of unexpected costs can arise for insurance, storage, or even fees applied for moving it. Portfolio Management is completely transparent, with no hidden costs. And, of course, following this model, there is no need to go through the process of obtaining a D.O. in order to become a whisky cask investor.
Yes. Business transactions are accepted. We will require AML documentation from the company director and any shareholders.
Your whisky cask investment would be safe.
The reservation forms will have details of your purchase including the specifics of the cask and the unique cask number. You will also have confirmation of payment. Together these documents prove you are the UBO. If Hackstons went into administration, these assets would not fall as part of our assets as we do not own them.
It depends.
5 years is recommended. However, the length of time can depend on the brand of whisky alongside your own financial goals e.g. how much money you wish to make back?
To aid in this, Hackstons’ expert Portfolio Managers will reach out to you when our research dictates the greatest returns while aligning with the goals you set out with. Our consultative approach means that you do not need to worry about watching the scotch whisky cask markets, we will do it for you!
In the UK, you do not have to pay capital gains tax on a cask of scotch, unlike bottled scotch whisky. Due to the casks being held under bond you also do not need to worry about applying for a wholesale license, Hackstons will handle these details for you.
Gains achieved with Scotch whisky casks are subject to local tax laws.
95% of our business is Scotch, however, sometimes we do procure casks from other countries.
No need to worry.
Hackstons has a vast network of whisky distilleries, luxury auction houses and private scotch cask investors who are all interested in procuring Scottish whisky. We will present your options and leave the final decision to you.
Yes!
Just reach out to your portfolio manager and we can assist in setting that up.
Yes.
If you are interested in exploring an exit strategy with us, we would be more than happy to help. Feel free to contact us.
Far less risky than stocks, equities and cryptocurrencies as there are far less points of failure. However, at Hackstons we believe in transparency so below is a list of potential risks of scotch whisky investing:
These risks are all either highly unlikely or can be managed by working with a brokerage such as Hackstons. Scotch whisky is a heavily regulated industry with strict controls on supply and demand with careful protections for investors and consumers alike.
Feel free to contact us and speak to our experts if you would like to learn more.