AIM Inheritance Tax Portfolio Service

For Professional Advisers Only

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Thorntons Investments have been investing in AIM listed companies for the purpose of seeking business property relief, for over ten years. Our deep understanding has been reinforced by involvement in executory submissions for a private client law practice. Our mantra of seeking qualifying companies that offer both growth and a degree of downside protection has proven highly successful.

We offer our AIM IHT model portfolio through the Standard Life Platform, providing both cost and administrative advantages.

We know it is crucial that clients are made fully aware of the risks and benefits of our service as part of their financial and estate planning, and this service is only available through qualified financial advisers.

Our AIM IHT Model Portfolio Service is listed on the MICAP Fund Finder. Advisers who subscribe to MICAP's research and due diligence services for tax-advantaged investments can find this here:

https://micap.com/

Thorntons AIM IHT Portfolio Service

Portfolio charges:

    • Annual Management Charge of 1% (plus VAT)
    • No Initial fee
    • No withdrawal or exit charge
    • No performance fee
    • No additional administration charge
    • Low dealing charges (£1 per stock trade)

Our ambition to generate sufficient dividend income to cover all client fees

Standard Life platform charges will also apply. 

Performance

Calculation Methodology   

Performance is calculated on a monthly total return (capital return with dividends reinvested) basis. Total return has been used to aid comparison although in practice dividend income will be held in cash to fund fees. The Thorntons Investments AIM portfolio includes all BPR qualifying AIM stocks we invested in for clients. An equal unit investment was applied to each company at the start of the calculation, with a new unit investment made to each new stock invested in, in the month in which it was first used. Where a stock was removed from use its value was transferred into the stock chosen to replace it.

Performance is calculated net of the investment fee of 1% (plus VAT), taken monthly, but excludes any dealing charges.

Performance is shown against the total returns of the FTSE AIM All-share, FTSE SmallCap (excluding Investment Trusts) and FTSE All-Share. Please note that these indices are given only as an indicator as to the performance of the wider market and should not be taken as a benchmark for the Thorntons Investments AIM portfolio.

Advantages from investing in BPR qualifying AIM shares for IHT Planning

Speed

BPR qualifying AIM shares held at death are expected to qualify for 100% relief from inheritance tax after being held for just two years. This allows more wealth to be passed on to beneficiaries.

This compares favourably with other forms of estate planning such as gifts in excess of available exemptions, which would require the donor to live for seven years for the gift to become fully exempt from IHT.

Access

Your client still retains full access to their portfolio, and can withdraw some or all of their investments at any time. They can request for shares to be sold should their circumstances change.

Simplicity

By comparison with AIM investment, traditional estate planning such as setting up trusts and gifting assets can prove complex and/or require medical underwriting.

Power of Attorney

Where making gifts or trust transfers are restricted or prohibited, an Attorney with the appropriate financial powers is allowed to invest in qualifying AIM shares, always taking account that the attorney must always act in the best interests of the donor given their personal circumstances.  

Potential for Capital Appreciation

The diversification of companies listed on the Alternative Investment Market provides opportunity for growth and dividends. 

Inter-spousal Exemption

AIM shares can be left to the surviving spouse on the first death without breaking the ‘two-year clock’. Where the AIM shares are held in an ISA, the surviving spouse will have an additional ISA subscription equal to the value of their partner’s ISA portfolio at death. They can move these holdings to their own ISA while keeping the ‘two-year clock’ running.

Key Risks

Potential for capital loss

The performance of shares in AIM-listed companies tend to be more volatile than those of larger companies and the risks of capital losses are greater. The value of investment may go down as well as up, and may end up being less than the initial sum invested.  

Business Property Relief (BPR) cannot be guaranteed

HMRC will assess AIM company qualification for BPR when an investor dies, meaning a qualifying investment cannot be guaranteed to always remain so. 

Tax rules may change

Rates of tax, tax benefits and allowances are based on current legislation and HMRC practice, and are dependent on an individual’s personal circumstances. These are all subject to change meaning that tax reliefs cannot be guaranteed.

The investment may be difficult to sell

The shares of AIM-listed companies can be more difficult to sell than those of larger companies, and may be illiquid. Investors looking to sell may have to accept a price below the real value of the companies, and may experience delays in completing a sale. 

 

For more information, please contact David Holmes, our Business Development Manager: 

Phone: 01382 214900
Mobile: 0770 128 4358
Email:  dholmes@thorntons-investments.co.uk  

 

 

For more information, please contact David Holmes, our Business Development Manager: 

Phone: 01382 214900
Mobile: 0770 128 4358
Email:  dholmes@thorntons-investments.co.uk