The Alternative Investment Market

The Alternative Investment Market


Individual Savings Accounts (ISAs) are tax free?

Many investors are not aware that when they die their ISAs are treated as part of their taxable estate and could be liable for the 40% tax charge.  To potentially avoid this not so insignificant liability, investing into portfolio shares on the Alternative Investment Market should be considered.

Clients would be invested in a portfolio of 20-30 carefully chosen companies who are listed on AIM and expect to qualify for Business Property Relief (BPR).  The government offers this relief in return for taking the risk of investing in smaller companies.

Shares in BPR – qualifying businesses can be left to beneficiaries free from inheritance tax, as long as they have been invested for at least 2 years when the investor dies.

In the meantime, you will have full access to your capital, in part or in full, or derive an income from the capital without penalty or tax liability.

This type of investment can be used for non-ISA capital as well.

Key Benefits

Business Property Relief investments should benefit from full relief from inheritance tax after just 2 years provided they are still held at the time of the investor’s death.

Access – unlike some other estate planning options, investors retain access to their investments at all times.

Simplicity – there are no complicated legal structures, no trust administration and no underwriting.

Growth – these arrangements offer the potential for significant growth and dividends.

There are of course risks as you would have with any other type of investment, and we can explain these to you.