the sterling-based three-year investment 'income plan' has a £1,500 minimum
Premier Cru Fine Wine Investments has launched its own intermediary consultancy division to help educate intermediaries on fine wine investing.
Gavin Saffer is to head the division. His role will involve training intermediaries on fine wine investing which will provide them with an understanding on how the market works. This will include understanding the supply and demand dynamics of wine selling and how different vintages reach their maximum selling price at different times.
Paula Golding, managing director of Premier Cru, said: "In the UK, fine wine is declared a depreciable asset by the Inland Revenue and is free from capital gains and income tax. Structured under a bond it is also free of VAT and duty, and also escapes inheritance tax. Anyone in the world can invest in it."
A client's portfolio can be structured according to their own investment profile, based on the amount, the term and reason for the investment. They are also able to mix their investment cellars to reflect a higher degree of flexibility if required, other than the standard low to medium risk cellars.
To be considered valuable a fine wine must be from a limited production, be produced under strict regulations, be from a recognised system of classification and have a complexity of taste and longevity that improves its quality with age.
According to Golding, demand has been growing annually as the world's inhabitants are introduced to the exclusivity and complexity of drinking fine Bordeaux wines. Over the past 10 years, US and Far Eastern buyers have come into the market with some force. They are not just buying wines to keep and sell on, they are buying them to drink, and are rapidly reducing the world stocks. She said average returns for investors are around 12% each year.
If a market is trading high on a particular wine, Premier Cru writes to the person with a recommendation to sell and replace with a young vintage at a lower price. Similarly if the wine looks to depreciate, Premier Cru writes to the client to advise them to sell and buy other wines.
In Permier Cru's sterling-based investment programme, each case of wine is insured for its full replacement value while they are in storage and transit. This costs £8.50 per case. Other charges include 2.55% for the first years warehouse storage. From the first anniversary of the cellar, the annual management fee is 1% of the cellar value.
Up-front or exit fees are not charged. There are also no redemption penalties or dealing charges unless sold at auction.
The minimum investment for a three-year plan is £1,500. The minimum investment for a five-year Income Plan is £10,000.
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