IHT-focused Aim portfolios launched

IHT-focused Aim portfolios launched

RC Brown, a fund house specialising in UK equities, is to launch Alternative Investment Management (Aim) portfolios for inheritance tax (IHT) planning purposes.

Most AIM shares, if held in a portfolio for two years prior to death, are exempt from inheritance tax.

The AIM portfolios at RC Brown will be run by Oliver Brown and Neil Whelan.

Mr Brown runs a Primary Opportunities fund at RC Brown, which makes significant investments in Initial Public Offerings (IPOs) among other equities.

About a quarter of all equity investments run by RC Brown as a firm are Aim shares.

The portfolio service will carry a charge of 1.25 per cent, plus VAT. Each portfolio will have between 25 and 35 stocks.

Fund manager Oliver Brown said: "We began the process last May for a large client and are now rolling it out more widely.

"A vital point of difference is the extra level of value we can offer through the prism of our ‘primary opportunities approach’, which means retail clients can enjoy an unusual level of access to IPOs and fund raisings etc.

"Newer clients will also have the reassurance of seeing this approach up and running in our Primary Opportunities Fund.

"Aim has seen some tremendous successes over the years, with the likes of Asos and Fever-Tree growing into multi-million pound companies, and now boasts over 1000 companies.

"But because we’re established investors in this area, we are well aware of the pitfalls as well as the potential for growth."

Francis Klonowski, an adviser at Klonowski and Co in Leeds, said: "Estate planning is something that comes into virtually everything I do.

"But when I mention to clients the level of underlying risk [of Aim shares], they don’t want it.

"The question to ask is, if the tax advantages were not there, would they invest in those assets?

"I like the concept of Aim portfolios myself, but it’s the clients' view of risk that matters.

"I would say, if this is something someone wanted, it is better to stick with the tried and tested, with the people that have a track record."