Sanlam UK has launched an inheritance tax service to allow clients to mitigate tax liabilities and generate long-term growth by investing in smaller companies.
The service allows clients to invest in a diversified portfolio of shares listed on the Alternative Investment Market, which provides exemption from inheritance tax through business property relief (BPR).
The diversified portfolio will be made up of 25 to 45 shares across a range of industries and with solid earnings growth potential.
Investors will be able to hold the shares in an Isa or Sipp, and can add or withdraw money at any time.
Each stock will go through an extensive screening process to try to ensure it qualifies for business property relief.
Charlie Parker, head of portfolio management at Sanlam UK, said: "With the launch of this new service, Sanlam UK reinforces its commitment to providing the best wealth and inheritance management strategies and solutions possible to our clients.
"A forward-looking approach is vital when it comes to protecting and planning your family's wealth for future generations.
"This inheritance tax service offers clients a straightforward, effective and flexible way to accrue and pass on wealth."
The service bears an initial charge of 1.5 per cent, and an annual management fee of 2 per cent.
VAT is also levied on the portfolio.
Aim has had more than 3,000 firms listed since its inception in 1995 and raised more than £60bn.
Tim Morris, IFA at Surrey-based Russell & Co Financial Advisers, said: "Diversification is always important - however, the screening process is the key to this.
"The main two concerns with this are the failure to receive the tax relief and the failure of a company. These are intrinsically linked.
"Increased scrutiny from HM Revenue & Customs to achieve the first, could lead to an increase to an increase in the number of company failures. This stresses the need to be able to look under the bonnet of such investments."
aamina.zafar@ft.com
