UPDATE: If you are looking for information on Delivery Orders you may also want to read our updated article on delivery orders: What is a delivery order and how do you get one?
One of the main attractions to owning a cask of whisky is that it is a physical asset. But as casks of whisky have to be kept in HMRC regulated bonded warehouses how can you be sure your cask exists and that you own it?
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We run through the intricacies of owning a cask and guide you through the areas to be wary of.
How Cask Ownership Is Transferred Within The Whisky Industry
Scottish distilleries have the combined capacity to fill over 1 million hogsheads of whisky every year and within the industry casks are sold on a large scale: Brokers buying whisky for blending purposes might complete sales of up to 1,000 casks at a time.
When the sale of the casks is complete the seller instructs the warehouse holding the casks to transfer title of the cask to the new owner.
The standard in the industry is that this is done via a delivery order, which is a document listing unique identifiers of the casks along with the seller and buyers details that is addressed to the Warehousekeeper at the casks’ given location. The Warehousekeeper then updates their records to hold the casks in the new owners account.
For private individuals the process is similar but on a smaller scale. In most cases a delivery order acknowledged by the warehouse will suffice, but for completeness you should also be able to provide a contract of sale and paid invoice.
Why Only A Signed Delivery Order Will Do
Casks are stored under duty suspension and a modest 2,000 cask warehouse would have approximately £9,000,000 of unpaid duty and VAT owed to HMRC. As such, HMRC require stringent stock and ownership records under the laws that govern warehouses and Warehousekeepers; WOWGR along with Excise Notice 196 and 197. Even in the smallest warehouses the Warehouse Keeper has a strict responsibility to ensure that accurate records of ownership are kept at all times otherwise their registration and licences may be revoked.
For the Warehouskeeper a delivery order provides:
- A record of goods and changes of ownership (Needed per Excise Notice 196 Section 3.3.4)
- Notification of sale from seller and buyer (Needed per Excise Notice 197 Section 8.1)
- Details of seller and buyer for due diligence checks on both (Needed per Excise Notice 196 Section 11)
It is ultimately up to each Warehousekeeper to decide what docmentation is sufficient to satisfy their responsibilities to HMRC. If you have confirmation directly from the Warehousekeeper where your cask will be stored that they do not require a physical signed “delivery order” then that is fine, but seek written clarification over what other documentation the accept. In all other cases you should assume a signed delivery order is needed.
As a Spear’s 500 Top Recommended Whisky Advisor Mark Littler is perfectly positioned to provide expert advice on all stages of buying, owning and selling casks of scotch whisky.
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How Cask Ownership Is Transferred When You Buy A Cask From Mark Littler Ltd
When you buy a cask from Mark Littler we are acting as your agent. As per the Scotch Whisky Association guidance we issue all our customers with a contract and invoice. Once paid they receive a delivery order outlining all of the cask numbers and seller details, which you will be required to countersign and return to the warehouse. When it is received you will then be the legal owner of the cask.
If something were to happen to Mark Littler Ltd while you owned the cask it would be instantly clear to an administrator that the cask belonged to you not Mark Littler Ltd.
It also means that you have full rights to transfer your cask to another individual, move the cask to another bonded warehouse or have the cask bottled.
When the title of the cask is transferred at a warehouse level you have full autonomy.
The chain of ownership can be summarised as this:
- The current cask owner sends you a delivery order to countersign directly
- The warehouse records are changed to state that you are the new owner
- If HMRC audit the warehouse it is clear that the cask is held in your name
- If the company who sold you the cask go out of business ownership of the cask is clear and could not be confused with the assets of the company
Summary: when you buy a cask with Mark Littler you will be issued a delivery order directly from the bonded warehouse so you can be guaranteed the cask is held in your name and your name only.
How Cask Ownership Should Not Be Transferred
The ownership of a cask or casks is not transferred with a certificate unless you have explicit confirmation from the warehouse that they will accept a certificate.
We have encountered casks that have been sold to customers who have only received a ‘certificate of acquisition’ or ‘certificate of title’. This is often a sign that the transfer of ownership has been done at a company level rather than at a warehouse level.
A certificate of acquisition or title means that although internal records of the company who sold the cask are changed to show that the cask belongs to Mr Smith, it is still held under the company name at the bonded warehouse.
This has serious implications for you, your cask and your investment. The potential issues around this kind of ownership is exemplified by what happened with Whisky Merchants Ltd in May 2025. In this very real situation cask owners have had to rush to prove to the administrator that they own casks, whereas if they had been transferred at the warehouse level via a delivery order the process of proving ownership would have been a lot easier.
On a more basic level this also means that should you ever want to transfer the ownership of the cask to somebody else, move the cask to another bonded warehouse or bottle the cask, you would have to do so via the company who sold it to you in the first instance. You would not be authorised to do this directly because as far as the warehouse is concerned the cask is not held in your name. If the company changes its name or fails to respond to your requests you have limited options because there is no ‘official’ record of you owning the cask.
In other words you do not have full autonomy over your asset.
The chain of ownership can be summarised as this:
- The XYZ company send you a Certificate of Acquisition
- Internal XYZ company records are updated to show that you are the owner
- Warehouse records still state that XYZ company are the owner of the cask
- If the company who sold you the cask goes out of business your asset is at risk if you do not have full confidence in the XYZ company’s paperwork
Summary: Issuing a Certificate of Title or otherwise is not a guarantee of ownership. More often than not it only indicates that the ownership of the cask has been transferred internally. You have no direct control over your cask.
Why internal transfers are cause for concern?
Internal transfers allow for Ponzi schemes
In case you do not know, a ponzi scheme is the sale of a singular item to multiple people. Warehousekeepers and bonded warehouses are very strictly vetted by HMRC and subject to spot checking, which means if a cask is held on record it is as safe as if it were in the Bank on England. When a cask is transferred by a delivery order the bonded warehouses simply acts as an independent third party in the ownership of your cask (you simply pay them rent). The warehouse is able to confirm that the cask is what the seller says, and that it is in the location the seller says.
If a cask title is only transferred internally then the Warehousekeeper, and therefore HMRC, has no idea anyone other than the company owns the cask. As the cask owner you are relying on an unregulated company to only sell that cask once.
Unfortunately ponzi schemes have been one of the most common scams in the alcohol industry. The Nant Whisky Group is one of the most famous past examples but there are current companies who have been associated with these types of schemes and wine investment scams are rife too.
How Do You Know If You Have Full Ownership Of Your Cask?
If you are already a cask owner and are concerned that the cask you purchased is held in your name or not all you need to do is consult your paperwork.
If you have only been issued a certificate of title etc then there is a very slim chance the cask is held in your name at the warehouse it is stored at because you are usually required to sign a delivery order.
If this is the case you should contact the company who sold you the cask in the first instance and ask them for a delivery order to transfer the cask into your name at the warehouse.
Insurance can also help you spot the problem
Another good indicator as to whether or not you have full legal possession of your cask is if insurance was included in the cost of your cask at the time of purchase. If your cask came with free insurance for x years this is a strong indicator that your cask is not held in your name at the warehouse level.
Howden Group are the only insurance broker that we know of that offers insurance for casks of whisky. Their minimum policy costs around £350 and insures up to £100,000 of casks. Increased cover, for instance £500,000 will only cost a small amount more as most of the initially £350 is their minimum policy fee. This applies to every new policy.
Consequently it is very cheap for a company holding £500,000 of casks to insure their stock if costs are looked at proportionately. This cover is blanket protection for all of the casks held only in the name of the policy holding company.
If ownership records are only changed internally then the stock at the warehouse can all be insured under the same company policy very cost effectively. If ownership records were changed at a warehouse level for every customer they will have to take out a new policy for every customer resulting in a £350 per year minimum policy fee for each customer.
As this is a sizeable cost, and one that would be accrued annually, it is unlikely that this could be offered for free. As such, if a company has offered insurance for X years as part of the purchase price you either paid a significant amount over the value of the cask at the time of purchase to pay for the insurance, or the company selling you the cask is operating at a loss, or they have not transferred the ownership and are therefore only paying one circa £350 per annum fee.
Do Bonded Warehouses ever go out of business?
Another consideration is what would happen if the warehouse went out of business?
It would not matter. HMRC would have records of all of the cask owners – which is updated monthly. Another company would take on the management of the bonded warehouse, or you would be notified to arrange to move your cask to a different warehouse and the new Warehouse Keeper would take over liaising with HMRC on your behalf.
It is worth noting that we have never known a bonded warehouse to fail or go out of business.
Questions or concerns about a cask you own?
We are always happy to answer people’s questions about casks. Whether it is a cask you already own or one you are looking to buy we are able to offer free advice on all aspects of cask investment and ownership. Simply send us an email and we will do our best to help.
