Despite leaks in advance, there was still intense speculation about Rishi Sunak’s ‘Covid’ Budget. Therefore, it was no surprise that the Budget laid out plans for further support for the economy and some nod to stimulation strategies, eg free-port initiatives, but generally it felt like a ‘holding position’ with the foundations being laid for future tax changes.
The freeze on personal allowances until the 2025/26 tax year could be described as allowing more time for the economic impact of the pandemic to flow through to a point when we will have restrictions lifted, some predictability about the future and a return to growth.
So, what impact on fine wine?
Duty and VAT levels remained unchanged, and whilst investment wine remaining in bond does not trigger these charges, for the retail trade and consumers this was seen as welcome news.
Capital Gains Tax treatment is an important consideration for investors generally and one of the attractions of investing in fine wine is that gains made do not generally attract CGT, subject to personal circumstances.
Sunak announced that the current CGT exemption level will remain the same until the 2025/26 Tax year, however the Treasury and Tax community have been looking at Capital Gains Tax and expected changes in this Budget seem to have been deferred. The 23rd March, Tax Day, will see further information based on consultation over the last year to be published and there is some expectation that further clarity on future changes on CGT may be announced in the Autumn budget.
For investors looking to manage CGT exposure given the potential for future increased application, fine wine is an important strategy for longer term planning.
For more information on the current Tax Treatment of Fine Wine, read our specialist report by an independent Tax Specialist and most importantly, consult your Tax Advisor. To learn which investment wines are currently offering the best opportunities for growth speak to a member of our expert team on 0203 384 2262.