The inheritance taxation rules on holding AIM (Alternative Investment Market) listed securities means that holding these investment securites (equities) for two years before death leads to no inheritance tax being payable on death, on the value of the portfolio at death. Of course this can be a high risk strategy, but with proper planning, research or the services of a good AIM VCT (venture capital trust) company this need not be so.
Now popular opinion has it that the stock market is dead, or at best dull, from now until the general election. This is not true. When everyone else is looking the wrong way, you’ll find some wonderful bargains.
The simple fact is that small companies are getting on with their lives. There are companies to be
run and customers to be serviced and they are doing just that. Did you see the news from Majestic Wine in
January? Sales up by around 12% for stores open for over a year and a significant rise in new customers?
The company works hard at its sales process and it’s paying off.
And of course Majestic is not alone. Advanced Computer Software (ACS)
was bought by many of the AIM VCTs at 17p and the price is now over 40p. ACS has raised cash and now
spent it on a large acquisition and is a continuing growth story.
So this general election isn’t really going to upset the apple cart is it? It’s a good excuse to worry about all sorts of things, but actually a new Government, if we get one, will find contracts in place. Even the national health IT programme is subject to long-term contracts that, we suspect, are going to be expensive to terminate, so the public sector will continue to spend.
System C Healthcare is an other company bought by some VCTs. A company like this may, by popular consensus, be in the wrong place on a purely simplistic basis. However, in fact, it is a winner from the hiatus because its systems operate at the hospital and Trust level. When the UK gets a national programme, built from the bottom up rather than the top down, it will be in a great position. So, as we’ve said, the general election isn’t going to upset too many of the smaller companies, as they will continue to grow.
Planning for IHT mitigation through an AIM portfolio is therefore both a sensible investment and good tax planning.
A double benefit!
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