Cask Ownership - The true cost
Owning your very own cask of whisky- either personally or chipping in with your friends- is a dream for a lot of whisky enthusiasts. You get to choose your own spirit, peat level, your own wood type, age and bottling strength. Awesome.
However, it can cost a lot of money and all those costs aren’t immediately obvious. That’s why we’ve written this article.
We’ve written down all of the costs incurred, when you incur them and what they might be if you buy a cask of whisky from us- The Uncharted Whisky Company.
BUT!!! Please do not confuse these with our “Cask Share” option. Our Cask Shares are completely different and you can read about them here.
So what are the costs?
Costs of whisky
It seems obvious to say, but to own a cask, you’ve got to buy it. When buying from us, we offer a constantly changing range of different casks of whisky at different ages. Choose the one that suits your tastes and budget. You can send us an email here to see what is available now. These range in price from around £1600 up to >£50,000 depending on age and rarity.
Costs of Storage
Once you have your cask, you need to store it somewhere. This must be in a HMRC approved warehouse- so no. You can’t keep it in your garage or man shed. Storage costs are very low. You can expect to pay no more than around fifty pence a week amounting to 26 pounds a year.
Works
Cost of works can often be seen as optional extras. There is a few examples below:
Sampling
We must ask the warehouse to take a sample from the cask, pay the tax and post it to you. This is again a small cost just to cover the time taken for the worker to search out your cask in the warehouse, open it up and dip it plus the admin of settling the duty on the sample before posting it. Depending on the size of the sample, you can expect to pay around £20-£25 plus the duty for this.
Movement
If you want to move your cask from where it currently lies to a preferred warehouse, a specialist courier must be used to move the cask under bond and ensure compliance with the law.
Re-racking
A service we offer often is to re-rack your cask. That means taking the liquid out of it’s current cask and transferring it into a new cask of your choice. This is often called “finishing”. A common example is to mature in an ex-bourbon cask for 10 years and finish it for 6 months or so in a fresh sherry cask. There are two costs here:
- To pay the warehouse to undertake the work (variable but in the region of £100 pounds).
- To buy the new cask which we are transferring liquid to. These can vary in price from only a few hundred pounds up to 800 pounds depending on the casks selected. Fresh sherry casks are usually the most expensive.
Re-gauging
When a cask is first filled with new make spirit the original litres of alcohol (OLA) that go into it is accurately measured and recorded. However, throughout its life it will lose some of this to the angel’s share and the devil’s cut. To find out the current content of the cask, a regauge is commonly done after a few years which will inform us of the exact amount of litres of alcohol (RLA) left in the cask. This typically costs around £20 – £60.
bottling and labels
Once you decide your cask is ready to be bottled, you must then pay for glass, closures, seals and labels. Bottles can be very cheap if you take advantage of a bottle and closure that is mass produced, however, if you want something more unique then it can cost more.
Likewise, labels are similar. If you take advantage of using our label format and printers, you will be able to take advantage of our economies of scale and save paying a designer’s costs to start from scratch.
The act of actually bottling a cask- transferring that liquid from cask to bottle- is another cost to be aware of. Expect to pay around 1.20 per bottle if you are supplying all other dry goods such as bottles, corks, boxes and labels.
Tax
Oh tax. The most necessary and the most evil of all the necessary evils.
There are two taxes due on whisky at the point it is bottled and removed from bond. The first is VAT. VAT must be paid on your cask when it is bottled. The current UK VAT rate is 20%.
The HMRC approved warehouse or bottling hall will calculate the final VAT bill on your behalf which must be paid before goods are removed from bond.
When bottles are removed from bond, duty is also due. The amount paid depends on the amount of alcohol in each bottle so a single malt bottled at 46% would have a higher duty bill per bottle than a single malt bottled at 40%.
The current rate of duty is £28.74 per litre of pure alcohol.
Examples
70cl bottle at 40% would have to pay £8.04
70cl bottle at 46% would have to pay £9.25
70cl bottle at 50% would have to pay £10.06
Remember, if you store your bottles in a warehouse, you don’t have to pay this tax until you actually remove the bottles from the warehouse. This can help spread the cost.
So there you have it. Those are the main costs of owning a cask. There is lots to it but it can be amazingly rewarding. Sometimes the additional costs prove too high or too much hassle and the client always has the option of selling the cask on before it is bottled to make life more simple.
If you’d like to hear about our available whisky casks, subscribe below.
Please get in touch if you’d like any more info or think that we have missed anything! Please remember that this is simply a guide, written in January 2021 and prices fluctuate and increase over time.
