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The impact of Inheritance Tax on their estate is a common concern for families looking to preserve and pass on their wealth to the next generation. We offer a portfolio that mitigates the effects of Inheritance Tax on clients’ estates by taking advantage of Business Relief.
Our award-nominated AIM portfolio allows clients to invest in qualifying companies traded on the London Stock Exchange (LSE) Alternative Investment Market (AIM). These are eligible for Business Relief.
In recent years, investment in AIM companies has grown in popularity as a viable estate-planning option and there are some significantly-sized companies listed on the AIM index. Shares in businesses that qualify for Business Relief will qualify for 100% tax relief after two years, rather than the standard seven years that other forms of estate planning like gifts and simple trusts will generally take.
Putting the portfolio together
We use a four-step equity selection process to put together a client’s AIM portfolio, and we’re rigorous in our research of the companies we invest in.
- We perform a quantitative analysis on the company, taking into account factors like growth, momentum, income and value.
- We study what type of business it is. What does it do? Who are the key competitors? How does the management team perform and what do the financial results tell us?
- Having fully assessed the business and met with its representatives, we give each company a score which measures its suitability for clients’ investment.
- We run it past our own experienced investment committee before making a final decision.
Once we have identified a suitable company, we continue to monitor it closely. If the company moves from AIM to the main market, or the business changes direction and finds itself no longer eligible for Business Relief, this would impact on investors, so keeping a continued eye on the company is vital.
Clients will always have access to their investments in their AIM portfolio and can decide to sell their shares at any time for their money to be returned to them (although IHT relief will be lost on money removed from the AIM portfolio). It is important to note that, by their nature, AIM shares are considered high risk.
If you would like more details about our AIM portfolio, please get in touch.
Get a bespoke review and advice on your existing investment strategy.
Our portfolio review service is an independent evaluation of the investment strategy and performance of your current investment manager after costs, and how this compares to the industry generally.
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 promised payment of income and the return of capital could be in jeopardy in the event that the company has problems meeting its financial obligations.
The FCA does not regulate Inheritance Tax Planning It is important that you seek specialist tax advice from an appropriately qualified professional, as Progeny Asset Management is not able to offer guidance or advice on taxation matters.
The value of investments and income from them is not guaranteed, can fall, and you may get back less than you invested. Your capital is therefore always at risk. It should be noted that stock market investing is intended for the longer term. There is an extra risk of losing money when shares are bought in some smaller companies, as there can be a big difference between the buying and selling price.