OUR EXPERTISE: Inheritance Tax Portfolio

Investors concerned that their family wealth will be eroded by Inheritance Tax (IHT) can seek to mitigate their liability by taking advantage of generous business property relief rules. Traditional estate planning solutions can be inflexible resulting in you no longer being able to access your wealth if you need to.

Our Alternative Investment Market (AIM) portfolio is a discretionary managed service to mitigate Inheritance Tax.

  • Invests in companies traded on AIM
  • Under current legislation, the value of your AIM portfolio will fall outside of your estate for IHT purposes after two years
  • Additional funds can be added to the portfolio but will be segregated from existing monies and have their own two year clock to ensure a clear audit trail to HMRC
  • The investor retains ownership and can therefore withdraw funds at any time**
  • No stamp duty on share purchases (under current legislation)
  • Can be incorporated into a tax efficient Individual Savings Account (ISA)

**Monies removed will lose relief status.

Investment in smaller companies can involve greater risk than investing in developed, more established markets. Above average price movements can be expected and the values of the investment may change suddenly.
The FCA does not regulate Inheritance Tax Planning.

 

AIM

AIM is the London Stock Exchange’s (LSE) market for smaller UK and international companies.

Launched in 1995, AIM is the leading market specifically designed to help growing companies access capital.

Over 1,000 companies from 100+ countries operating across 40 different sectors are traded on AIM with an aggregate value of over £73 billion*.

*Source: LSE

 

Objectives

AIM for IHT invests in a portfolio of c.30 AIM-traded securities that are considered to qualify for business property relief, seeking profitable cash-generative companies focusing on:

  • Prospects
  • Liquidity
  • Yield
  • Dividend Cover
  • Free Float Market Capitalisation
  • Forecast Earnings growth
  • Gearing
  • Management
  • Comparative analysis

 

Business Property Relief

Investment in AIM traded securities for the mitigation of IHT takes advantage of the Business Property Relief rules.

Legislative attacks on trusts has focused attention on AIM investment as a viable estate planning alternative.

AIM membership does not guarantee that a company’s shares will attract relief, but qualifying unquoted companies attract 100% relief after two years.

Relief is available to trading companies excluding those that deal in securities, land/buildings or holding investments and those with dual listings.

A person inheriting from a spouse or civil partner also inherits their period of ownership.

The regulations governing replacement assets allow proper management of a portfolio as the rules enable an investor to buy and sell AIM shares at any time without resetting the investment relief clock.

Once a suitable company is identified, monitoring is paramount as an investor is in danger of losing tax reliefs if it moves to the main market, changes business direction or sells part of its business for cash but fails to identify any future use for the money.

Latest news

And the winner is…… Northern Island

Election commentary by Investment Manager David Battersby A second election in as many years and the Conservatives are still the largest party but no longer with a majority so how did this come about. On 18th April Theresa May announced a snap general election to take place on Thursday, 8thJune. This was a surprise even…

Details