Buying Wine in Bond: Understanding Duty-Suspended Storage
Updated
Buying wine in bond allows you to defer the payment of excise duty and Value Added Tax (VAT) until the wine is removed from approved storage for consumption or sale. This practice is particularly beneficial for collectors who acquire fine wine at auction and intend to hold it for an extended period or sell it on the secondary market. By keeping wine in bond, you avoid tying up capital in taxes that may not be due for years, and you can sell the wine without ever incurring these charges yourself. It is a strategic approach for managing your fine wine portfolio efficiently.
What is "in bond" wine storage?
"In bond" wine storage refers to the holding of "duty-suspended excise goods" in an "excise warehouse," as defined by HM Revenue & Customs (HMRC) in Excise Notice 197. An excise warehouse is a premise that HMRC approves for the storage of such goods. Wine is "deemed to be warehoused when they enter the area approved by HMRC," according to HMRC's Excise Notice 197, section 6.
The Excise Movement and Control System (EMCS), an electronic system, records and validates the movement of duty-suspended excise goods within the UK and between Northern Ireland and the EU. Before a movement of excise goods can take place, the consignor must complete and submit an electronic administrative document (eAD) using EMCS. Once validated, EMCS assigns a unique Administrative Reference Code (ARC) for that movement, which must travel with the goods. The consignee then submits a report of receipt on EMCS no later than five days after receiving the goods, confirming their arrival and discharging the financial security provided for the movement. If EMCS is unavailable, fallback procedures allow movements to proceed with a fallback accompanying document (FAD), as detailed in HMRC's Excise Notice 197, section 3.1 and 3.2. You can learn more about secure storage practices in our guide on how to store wine.
How does duty and VAT apply to in bond wine?
Excise duty and import VAT are suspended while wine is held in a customs special procedure or under an excise duty suspension arrangement, as outlined in HMRC's Excise Notice 197, section 8.1. The standard VAT rate in the UK is 20%, as stated by GOV.UK: VAT rates.
HMRC sets specific alcohol duty rates for wine (including sparkling wine) based on its alcohol by volume (ABV), as updated on 1 February 2026. These rates are applied per litre of pure alcohol in the product:
| Alcohol by Volume (ABV) | Amount of duty in £ (pounds) for each litre of pure alcohol in the product |
|---|---|
| 0 to 1.2% | 0.00 |
| 1.3% to 3.4% | 9.96 |
| 3.5% to 8.4% | 26.61 |
| 8.5% to 22% | 30.62 |
| Stronger than 22% | 33.99 |
Duty becomes payable when goods are removed from the excise warehouse for home use, also referred to as "released for consumption," according to HMRC's Excise Notice 197, section 11.1. As the warehousekeeper, you would submit a warrant, such as a W5D for deferred payment of alcohol duty or a W5 for immediate payment, to HMRC. Payments over £20 million can only be made by CHAPS, as per HMRC's Excise Notice 197, section 11.6. Understanding these costs is crucial for financial planning. Our landed-cost calculator can help you estimate the total cost of your wine, including these taxes.
What are the rules for moving and selling in bond wine?
Owners of "duty-suspended excise goods held in a warehouse may sell their goods in duty suspension at any time," as stated in HMRC's Excise Notice 197, section 9.1. When a sale occurs, the current owner "should inform the warehousekeeper that the goods are to be sold and give details of who the new owner will be," according to HMRC's Excise Notice 197, section 9.1.
For movements of wine in duty suspension, a "movement guarantee" is required. This is a form of financial security that a bank or other approved financial institution underwrites, intended to protect the revenue at risk, as detailed in HMRC's Excise Notice 197, section 4.1. The guarantee provider accepts liability for any excise duty that may become due if an irregularity occurs during the movement. HMRC normally sets a minimum guarantee level of £20,000, as per HMRC's Excise Notice 197, section 4.7.
When buying wine at auction, such as through Christie's, the auction house charges a buyer's premium. Christie's charges "25% of the final bid price of each lot" for wine, and "taxes are payable on the premium at the applicable rate," according to Christie's New York Conditions of Sale, Wine. Buyers are generally expected to remove their property within "seven calendar days of the auction." If lots are not collected within "120 calendar days of the conclusion of the auction," Christie's will store them at the buyer's expense and risk with a third-party warehouse, The Wine Cellarage, at its New York storage location, as stated in Christie's New York Conditions of Sale, Wine.
Christie's collects New York sales tax at a rate of 8.875% for any lot collected from Christie's in New York. For shipments to states other than New York, Florida, New Hampshire, and Wyoming, and for international shipments (unless specific freight forwarder conditions are met), Christie's "shall collect New York sales tax at a rate of 8.875%," regardless of the destination, as per Christie's New York Conditions of Sale, Wine. Christie's may only ship wines to states where it has appropriate licenses and/or permits, currently New York, Florida, New Hampshire, and Wyoming. For shipments to New Hampshire, Christie's may not ship more than "twelve (12) 9-liter cases or equivalent of wine to any one consumer" in any calendar year and collects an 8% fee of the hammer price plus buyer's premium (exclusive of sales tax). For shipments to Wyoming, Christie's may not ship more than "108 liters to any one household" within any twelve-month period and collects a 12% fee of the hammer price plus buyer's premium (exclusive of sales tax), according to Christie's New York Conditions of Sale, Wine. For more on selling, consult our guide on how to sell fine wine, and for buying, see how to buy wine at auction.
Understanding the full cost of acquiring and holding fine wine is essential for any collector. Our landed-cost calculator provides a comprehensive breakdown of all charges, including duty and VAT, helping you make informed decisions for your collection.