AIM portfolio service

If you’re planning on leaving a legacy, you’ve probably thought about how inheritance tax (IHT) might affect the wealth you pass on to your loved ones. You may feel you’ve left it too late to start organising your affairs or are concerned about giving away your assets. But if you have at least £50,000 to invest, there are options open to you.

If you’ve identified that you’re likely to have an IHT liability, investing in the UK’s best known smaller companies market, the Alternative Investment Market (AIM), may allow you to mitigate some of that tax burden. Many shares on AIM, some of which are well known brands like ASOS and Fever-Tree, are treated as unquoted shares for tax purposes. This means they may qualify for business property relief (BPR), which can provide 100% relief from IHT provided the shares are held for a period of no less than two years prior to death.

Using AIM investments as part of your IHT planning has added benefit. It allows you to retain control over your capital, as you do not pass on the shares until after your death. This means you can continue to draw an income from your AIM portfolio. You also have time to decide exactly who you want the beneficiary to be after your passing.

In summary:

  • Many AIM shares qualify for BPR, which provides 100% relief from IHT when passing them on after death (if they have been held for a minimum of two years).
  • You don’t have to gift AIM investments in order to receive the IHT exemption meaning you retain access to the capital.
  • You have access to the dividend income generated by the portfolio.
  • You can hold the shares in an ISA.
  • AIM assets can pass to a surviving spouse without resetting the two-year IHT “clock”.
  • Stocks are picked for both their BPR eligibility and defensive characteristics.

Understanding your situation – are AIM investments right for you?

It’s worth bearing in mind that AIM investments are considered high risk. So it’s important to establish your capacity for loss. In the, albeit unlikely, event that your portfolio was to suffer a catastrophic loss, we would need to be comfortable that your standard of living would not be materially affected. Thus you should consider your potential future care costs, annual income and outgoings, whilst making a generous assumption of life expectancy.

Our AIM portfolio expertise

Our AIM investment management team has a combined 60-plus years’ experience. Our goal is to help reduce your inheritance tax bill by investing in BPR qualifying AIM stocks. We can work with our private client tax and independent financial planning teams to create a clear picture of your estate before we invest a pound. If you have your own advisers already in place we can work with them to achieve the same goal.

You will have direct access to the team who manage your money and you can have regular meetings to ensure the strategy and investments are still suitable for you.

The team will:

  • Help you ascertain a suitable amount for investment
  • Set up a bespoke investment portfolio with 15-40 AIM holdings
  • Liaise with our tax experts to make sure your entire portfolio qualifies for BPR
  • Undertake thorough due diligence to ensure we are investing in companies with strong balance sheets, sustainable dividends and experienced management teams.

To find out whether this service is suitable for you please get in touch with a member of our team.

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