We have an existing client who is looking to take on a new business which sells whisky investments. As I understand investors purchase whisky in barrels which are held in bonded storage in the warehouse until the time comes when they either sell them or drink them. The company will also sell bottles/ casks separetely for drinking however I believe this is a small proportion of the income.
I believe any gains by investors will be CGT free but am interested in the tax and VAT treatment for the sales by the company. Presumably the sales of bottles will have standard treatment and there will be no duty payable as this is paid by the manufacturer, however the client believes there is no VAT due on the investment sale as long as this remains in bonded storage, however I can find no guidance on this. If so, would this be a zero rated sale or exempt?
Any other considerations?
Thanks in advance.