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US investor raises £100,000 against bonded collection of fine wines

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A US-based wine collector is taking advantage of his current collection to borrow funds to invest in more fine wine.

Working with luxury asset lender Suros Capital, the investor secured a loan of £100,000 against part of a wine collection, including a case of Petrus 1982 valued at £42,000,and Romanee Conti 1990 (approx £16,000 per bottle). The wine is stored in a UK based Bond facility.

Bonded warehouse wine is considered tax efficient

Fine wine is a highly regarded investment opportunity and storing a collection in a bonded facility is a tax-efficient means of storing this investment. Through this storage method, wine can be purchased, warehoused, and resold, with tax only being due if the wine leaves the facility.

A strict protocol set by HM Revenue & Customs allows investors to store wine ‘under bond’, thus deferring payment of excise duty and VAT until it is removed. For those interested in collecting, auction sales are facilitated under this regime, as stock does not have to be moved – a change in ownership is simply notified to the Bond facility for the transaction to be completed.

In this particular case, the stock was moved to the ownership of Suros Capital upon which the funds were released to the client.

With more growth potential in his specific wines, the client wanted to retain his investment whilst freeing up funds for further upcoming wine purchase opportunities.

Fine wine is up by over 127% in 10 years

According to Knight Frank, fine wine has increased in value on average 127% in 10 years, making it a strong option for savvy investors looking for growth opportunities outside of the usual routes.

Speaking about the company’s specific wine lending service, Suros Capital Business Director Charles Hodge said: “We have a number of clients who use our service to raise funds against their collections of fine wine. Fine wines represent excellent long-term investment opportunities and borrowing funds against a wine collection held in bond means that there are no tax implications for the owner, who is able to leverage their asset without attracting any capital gains penalty.”

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This article does not constitute investment advice. Do your own research or consult a professional advisor.

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