Alternative Investment Market (AIM) shares to be allowed into stocks and shares ISAs

From Monday 5 August 2013, shares trading on the AIM will be allowed to be held in Stocks & Shares Individual Savings Accounts (“ISAs”). Some AIM shares attract Business Property Relief (“BPR”) which means they become exempt from Inheritance Tax (“IHT”) after they have been held for two years.The new rules on ISAs therefore creates two excellent tax advantages for clients as it is now possible to have ISA investments that are exempt from inheritance tax. ISAs have been hugely popular since they were first offered as a means of tax-efficient investment in 1999. Some investors may have built up ISAs worth hundreds of thousands of pounds and have always faced the prospect that their beneficiaries would have to pay 40 per cent inheritance tax on these savings. Create Wealth director, Peter Davies said “Holding AIM shares within an ISA will depend on the level of risk client’s are prepared to take and their capacity for loss. They will certainly not be appropriate for everyone in view of the higher level of risk and volatility associated with these type of assets. However, this is an interesting development and something we will take into account with our clients planning’.

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