Good fine wines are no longer just a pleasant hobby but they can now be considered an investment too. For some it can be very lucrative and unlike stocks and shares you can still enjoy it even if the value drops significantly! Experts within the wine industry say the best investors can see returns of up to 30% a year from some bottles and at the end of the day if the value falls you can always drink it! One golden rule therefore is only invest in wine which you would like to drink. As with any investment the key is to buy a well recognised brand which is a good vintage or has a good track record and is scored well by the critics.
Once bought you can choose to keep it in your own cellars but beware it can affect the value if it is not stored correctly. The alternative to keeping it yourself is to keep the wine `under bond`. This way it will be stored for you by a wine merchant in the correct conditions, you will not pay UK duty or VAT, on the purchase, and you will be insured for loss should for any reason the wine get ruined or destroyed. As with your money it depends what you buy when thinking of a long term investment. Normally the better the wine, the longer it will take to mature which can be anything from 10 to 20 years. In January 2004 a case of 1996 Chateau Lafite Rothschild would have cost you 1750 euros but for example if you wanted to buy a case now it will cost in the region of 4800 euros. Beaujolais Nouveaux on the other hand only tends to hold its value for six months after its release. An interesting fact is that the Inland Revenue views wines as a `wasting chattel` which is an old tax term describing something which will ultimately deteriorate in value, therefore you will not have to pay Capital Gains Tax should you make a profit in your cellar.