1. Duty and VAT Deferral: One of the main benefits of buying wine in bond is that the payment of duty and VAT is deferred until the wine leaves the bonded warehouse. This can be particularly advantageous for investors or collectors who plan to hold onto the wine for an extended period of time. By deferring the payment of taxes, buyers can potentially save money in the short term and have greater flexibility in managing their wine investments.
2. Quality Assurance: Bonded warehouses are licensed and regulated by the government, ensuring that the wines stored within them are properly handled and kept in optimal conditions. These facilities are equipped with temperature and humidity controls, providing a stable environment for the wine to age gracefully. This can give buyers peace of mind knowing that their investment is being stored in a professionally managed facility.
3. Provenance and Storage History: When purchasing wine in bond, buyers can often access detailed information about the wine's provenance and storage history. This can include details such as the wine's origin, previous owners, and storage conditions. Having this information can be valuable for collectors who are interested in the history and pedigree of their wines.
4. Resale Value: Wines that have been stored in bond may have higher resale value compared to those that have not. This is because buyers can be more confident in the wine's storage conditions and provenance, which can increase its desirability among collectors and investors. Additionally, wines in bond may be eligible for certain tax advantages when sold, further enhancing their appeal to buyers.
5. Flexibility and Accessibility: Buying wine in bond allows buyers to have more flexibility in deciding when and how they want to take possession of the wine. Since the duty and VAT payment is deferred, buyers can choose to leave the wine in bond for as long as they desire, without incurring additional costs. This can be particularly beneficial for those who have limited storage space or prefer to age their wines for an extended period before enjoying them.
However, it's important to note that there may be costs associated with storing wine in bond. Bonded warehouses typically charge an annual storage fee, which can vary depending on the quantity and value of the wine being stored. Buyers should also be aware of any additional fees or requirements for releasing the wine from bond, such as transportation costs or proof of ownership.
When a wine is described as being “in bond,” it means that it is stored in a government-approved bonded warehouse, and the payment of duty and VAT is deferred until the wine leaves the warehouse. This storage method offers benefits such as duty and VAT deferral, quality assurance, provenance and storage history information, potential resale value, and flexibility in accessing the wine. However, buyers should be aware of the associated costs and requirements when considering purchasing wine in bond.