Recently Mark Littler (expert whisky broker and Editor in Chief of The Whiskey Wash) filmed a video covering the 14 most asked question on Cask Investment. You can watch the full video over on the Mark Littler YouTube, or read on for the quick fire roundup of the 20 minute video.
If you’re interested in finding out more about buying and owning casks of whisky then make sure you check out the content on Mark Littler Ltd. It’s all designed to give you as much information as possible to make an informed decision and avoid scams.
What is cask investment and how does it work?
Cask investment is based on a simple reality of the Scotch whisky industry. Whisky becomes more valuable as it ages, so you buy a cask early in its life and hold it until it becomes older and more desirable. The real investment is time. A whisky’s value comes from years spent in the barrel, and there is no way to speed up the maturation process.
Who is cask investment suitable for?
Cask ownership suits people who can commit to holding a barrel for at least 10 to 20 years. The best results almost always come from long-term ownership. If you cannot commit to a minimum of 10 years, cask investment is not a good fit.
How much does a cask of whisky cost?
Prices vary by age, size, distillery, and where you buy it. New make usually ranges from £2,000 to £5,000. Young casks of 5 to 10 years often cost £4,000 to £6,000. Buying directly from a distillery is usually more expensive. Only invest what you can afford to lose.
What is the best age to buy a cask?
The ideal age depends on your time frame and budget. New make is the lowest cost but requires the longest hold period. If you want a shorter wait of at least 10 years, a 5 to 8 year old cask costs more upfront but reduces ongoing storage time. Aim to reach at least 18 years of age.
Are cask investment returns guaranteed?
No. Casks are not regulated in the UK, and returns are never guaranteed. Risks include evaporation, market changes, and inflation. Long-term trends show older whisky sells for more than young whisky, but you should never invest more than you can afford to lose.
Is the profit from selling a cask tax free?
Most cask owners in the UK report that casks are free from capital gains tax because they are considered wasting assets with a lifespan under 50 years. This applies to casks, not bottled whisky. Tax rules vary country to country and may change in the future, so you should always get personal financial advice.
What are the hidden costs of holding a cask?
Key ongoing costs are storage, insurance, regauges, and samples. Storage can range from £35 to £200 per year depending on the warehouse. Insurance may not be worthwhile for cheaper casks. A regauge or sample usually starts around £70 plus shipping. There should not be any undisclosed charges.
How do I get an accurate valuation for my cask?
The only accurate valuation is the price the market is willing to pay. Values rise and fall with demand. Casks under 12 years old and held for fewer than three years are often worth close to their original purchase price. For older casks, brokers can help provide a realistic market estimate.
What documentation proves you own the cask?
You need a contract, a paid invoice, and a warehouse acknowledged delivery order. The delivery order is critical because it gives you control over the cask inside the warehouse. Without it, you do not have full autonomy to move, bottle, or sell the cask.
What are the key scams and red flags to watch for?
Price manipulation is the most common issue. Heavy sales pressure, no delivery order, and calls claiming your cask has increased in value are major red flags. You can use the Cask Calculator to check if quoted prices seem inflated. Never buy without a warehouse issued delivery order.
Should I invest in ex sherry or ex bourbon casks?
Both are proven and widely accepted in the industry. Ex sherry and ex bourbon casks have long-term demand, and both are suitable for investment. Avoid wine casks or unusual barrel types if your goal is financial performance, because the market for them is less predictable.
Which distilleries offer the best investment potential?
The strongest potential usually comes from mid tier distilleries with room to grow. Very new distilleries have limited track records, and top tier distilleries like Macallan already carry premium prices. Marketing power drives value, so choose established names that are not yet at the upper end of the price spectrum.
What is the angel’s share and how does it affect value?
The angel’s share refers to yearly evaporation from a cask, usually around 2 percent on average. Losses can be higher in the early years. As whisky ages, the volume inside the barrel declines. This affects final yield and value. You can monitor levels by requesting a regauge.
How do I sell my cask when I want to exit?
If your cask is at least 18 years old and you have held it for 10 or more years, the first step is to request a regauge to confirm volume and ABV. You can sell through a broker, a dealer, an independent bottler, or sometimes through auction. Selling back to a distillery is not usually the most profitable route. For private individuals bottling is rarely a cost effective way to exit because of the additional taxes and bottling costs due. However if you want to bottle a cask for personal use or gifting that’s fine as long as you understand the costs and have full ownership of the cask via a delivery order.
If you want to find out more about buying and owning whisky casks you can watch more videos from Mark Littler over on YouTube, or explore more cask buying guides on MarkLittler.com.
Read the full article at Thinking of Buying a Whisky Cask? Read These Expert Answers First
