TDN Weekend December 2016 Issue 9
Issue link: https://www.e-digitaleditions.com/i/1045316
Hammond is quick to point out how the appeal of investing in wine may be similar to that of owning a Thoroughbred for those working in financial markets. "In the U.K., wine and racehorses are generally exempt from capital gains tax, as both are viewed as 'wasting chattels,' which means they have a useful life of less than 50 years, so ownership can prove tax-efficient," he says. "I know you have consortiums that breed and sell horses too, and that's also something we can do, so that a group can buy wine together." Like horses, keeping and storing wine can incur its own costs, and a merchant will be best placed to advise on this, with a solution to preserve your assets, tak- ing into account insurance, and even temperature and humidity. "Another similarity, I imagine that breeding and selling horses has a low correlation to convention- al markets," Hammond adds. "For our customers who are bankers, because a lot of their investments use traditional financial instruments, they tend to perform well or badly in similar ratios, but wine can buck the trend. It has a different correlation." The traditional approach to wine investment is to concentrate on Bordeaux and, to a lesser extent, Burgundy, the Rhône, Champagne, and Port. Growing in popularity are the Super Tuscans of Italy, and the so-called icon wines of the New World such as Austra- lia's Penfolds Grange, and California's Opus One and The golden rule of investing in wine is to deal with a reputable merchant – someone who knows what they are doing.