Inheritance Tax  

Thesis launches Aim inheritance tax portfolios

Thesis launches Aim inheritance tax portfolios

Thesis has launched a new managed portfolio service to invest in Aim (Alternative Investment Market) companies with shares that are exempt from inheritance tax.

Most Aim shares qualify for business property relief (BPR) which makes the investments exempt from inheritance tax.

The exceptions are Aim companies that invest purely in property assets, or are investment vehicles buying other businesses.

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Thesis will offer portfolios that invest both passively and actively, and in individual shares as well as other funds of Aim shares.

Matthew Hoggarth, head of research at Thesis, will run the portfolios.

The fee is 1.2 per cent.

Mr Hoggarth said: “Companies admitted to Aim can be young, growing and dynamic, and provide a great opportunity to help boost the UK economy from the ground up.

"Coupled with the inheritance tax benefits, it makes it a compelling proposition for investors wishing to pass on more of their wealth to loved ones.”

Adrian Lowcock, investment director at Architas, said: “The key to making this sort of service a success is combining the tax rules with excellent stock selection as whilst Aim shares can be higher risk and investors could easily lose more than they benefit from the tax reliefs there are many Aim companies which can add value on top of the tax benefits of running an Aim portfolio.  

"In Thesis the company has expertise in stock selection through their funds as well as a deep knowledge of tax issues which apply to the holding Aim shares.

"Such services do typically cost a bit more than managed funds as they are often bespoke portfolio’s run for individuals and there is a significant amount of research that needs to be conducted.

"A concentrated portfolio is fairly common as it allows each investment to make a meaningful contribution to the portfolio’s performance.

"I would also add a word of caution to investors – don’t let the tax reliefs be the main driver for an investment decision and whilst Aim shares can be exciting and there is the potential for fast growth the market overall has failed to live up to this expectation.

"There are a lot of Aim companies which fail or don’t go anywhere for years – performance is key, but can take a few years to become visible.”

david.thorpe@ft.com