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24 March 2021

Watches – and why it is so important to have regular valuations

Watches are highly collectable, take up little space and incur no Capital Gains Tax. As such, they’re becoming increasingly popular as an investment option, and the current appreciation in value is impacting not only the high end of the spectrum, but basic models too. Here, we talk to two specialists to find out more.
 
James Lowe, Watch and Jewellery Specialist, Doerr Dallas Valuations, says: “As we know HMRC regards watches as ‘wasting assets’ and as such do not charge Capital Gains Tax on any profit after sale. This can be viewed as a rare gift from the taxman and has consequently attracted many collectors to the watch market.”
 
With watches now such a popular investment choice, big gains can be achieved. For example, a gentleman’s steel Oyster perpetual bracelet watch (ref 116000 valued at £1,970 in 2000 is valued at £5,800 today, representing a 194% increase. A gentleman’s steel Oyster perpetual Submariner bracelet watch (ref 14060) that was £1,450 in 2000 now sells for around £7,000, representing a 383% increase; and a gentleman’s 18 carat yellow gold Oyster Cosmograph Daytona bracelet watch (ref 116528) that cost £10,500 in 2000 now sells at £27,650, a 263% increase.
 
The volatility in market values makes it essential to have regular insurance valuations, ensuring any watches in your collection are insured for their current market value. When carrying out a valuation, however, it’s necessary to establish how and where the client would likely source a replacement in the event of a loss, as this can affect the valuation.
 
James Lowe explains: “On discussions during a valuation, the client may look to replace ‘Like for Like’ rather than replacing with a similar current model, as many watches are no longer available, and the model might be obsolete. Some models of watches have a waiting list, so if you don’t want to wait the only option is to return to the open market, where you can replace immediately but with a much higher price, thus affecting valuation.”
 
So, which models are at the high end of the market? Senior Valuer at Doerr Dallas Valuations, Alastair Meklejon, believes Gerald Genta may just be the greatest wristwatch designer of all time, he cites his understated yet iconic Polerouter Microtor (one of the first he produced, and two of his design classics) the Audemars Piguet Royal Oak (1971), and the Patek Phillipe Nautilus (1976). Clearly aimed at the luxury market, a 1981 Audemars Piguet Royal Oak 4100 would set you back ten times the cost of a Rolex Submariner!
 
Meklejon says: “The joy of both the Nautilus and the Royal Oak is that there are models to suit all budgets, from under £10,000 for a gold and steel version of both models, right up to over a million pounds for some incredibly ‘esoteric’ models, encrusted with more diamonds than the average royal tiara! The key with both is knowing the models and their differences. It can be tens of thousands of pounds’ difference for, what may look to the untrained eye, a very similar timepiece.”
 
“Gerald Genta also worked on designs for IWC and Cartier, all unique and retaining the Genta DNA that set them apart from the more pedestrian offerings of the big players.”
 
In summary, the advice would appear to be simple: when buying a high-end watch, always deal with an expert, and make sure any watches you possess are regularly valued to ensure they are not only insured at market value but would also provide the necessary cover to fund a replacement.
 
To discuss insurance for your watch, jewellery or fine art collection, to advise us of any changes or to arrange any other aspect of your high net worth insurance, please contact Erskine Murray on 0116 265 4300 or email [email protected]
 
Rachel Doerr – Managing Director, Doerr Dallas Valuations Ltd

A bespoke, independent specialist Valuation company. Rachel’s team of experienced specialists cover nearly every category from jewellery and watches to manuscripts, fine art, wine and more.  They value items for many purposes including Insurance, Probate, Tax Planning, Sale, Loaning to ensure clients understand the true value of their assets.

T: 01883 722736 / M:07876653602
E: [email protected] or [email protected]
www.doerrvaluations.co.uk