AIM, the London Stock Exchange’s international market for smaller growing companies, is home to over 800 companies. It is no longer just about highly speculative micro caps that may never generate a profit - or cash for that matter! There are now hundreds of AIM companies with robust business models and a history of profitability, cash generation and attractive dividends - at the end of January 2021 AIM had 25 companies valued at more than £1 billion, the largest of which was valued at £4.5 billion and would therefore be eligible for entry to the FTSE100 index of leading UK companies.
Many of these excellent businesses have seen their shares soar over the past few years, far outperforming larger but lower growth companies on the main stock market - our research has uncovered plenty of AIM stars and also provided an early warning of problems.
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Investment in ‘qualifying’ AIM companies can attract 100% relief from inheritance tax provided that the investment is held for at least two years - that’s about the biggest tax break the UK government has ever given us so it seems like a good idea to use it, especially with the potential for investment success as well. You can find out which AIM shares qualify by using our unique AIMsearch tool by clicking here.
Investment in AIM companies for IHT planning purposes is all about constructing a well-balanced diversified portfolio of qualifying AIM shares, not just about individual stock selection. AIM Inheritance Tax portfolios managed by our associates Fundamental Asset Management have delivered outstanding returns since inception in 2004.
The tax benefits are only available to individual UK tax paying investors holding shares in their own name (through a stockbroker’s nominee is fine), so the individual investor can’t invest in a fund and still receive the Inheritance Tax benefit.
So AIM really is a market where the small private investor should have the upper hand.
This is not an offer to sell or a solicitation of an offer to purchase shares. The information and opinions stated above are for background purposes only and do not purport to be full or complete. Past performance is not necessarily a guide to future performance as the price of shares can fall as well as rise and you may not get back all the money you invested. The extent of the tax benefits referred to above will depend on the qualifying conditions and investors should seek professional advice before considering investing. No reliance may be placed for any purpose on the information or opinions contained in this document of their accuracy or completeness.