Most AIM stocks are exempt from inheritance tax (IHT) if they’ve been held for more than two years, and depending on individual circumstances it may be possible for AIM shareholders to qualify for the income tax and CGT reliefs when held via an Enterprise Investment Scheme, or through CGT Entrepreneurs Relief.
Do all AIM shares qualify for IHT relief?
Not all AIM shares qualify for inheritance tax relief, though most will. Generally, property companies, finance companies or professional companies will not qualify for IHT relief. Is an AIM portfolio risky? These types of shares are considered high risk.
Which AIM stocks qualify for IHT?
Shares traded on the Apex and Access segments of the Aquis Stock Exchange also qualify for IHT relief. IHT-related investments and portfolios represent an important component of the cash invested in AIM companies. Views on how much of the money invested in AIM is for tax planning reasons vary.
Which AIM shares are exempt from inheritance tax?
Any qualifying AIM shares will be exempt from inheritance tax, as long as you have held them for two years or more on your death.
Are shares subject to IHT?
Shares in a private company are subject to IHT but there is a very valuable relief known as business property relief (BPR). If BPR applies then the shares can be transferred on death or during lifetime free of IHT.
What qualifies BPR?
To qualify for BPR, a company must not be listed on a main stock exchange. Such companies could fall in value, and investors may get back less than they invest.
Do AIM shares qualify for BPR?
An AIM listing alone does not guarantee that shares will qualify for BPR. … The shares must have been held by the transferor for a minimum continuous period of two years prior to the claim for relief being made.
What qualifies for business property relief?
What businesses qualify for Business Property Relief?
- A qualifying trading business or an interest in one.
- Shares in an unlisted qualifying company, including a minority holding.
- Shares in a qualifying company listed on the Alternative Investment Market (AIM) of the London Stock Exchange.
Are AIM shares quoted or unquoted?
Shares and securities traded on the Alternative Investment Market (AIM) are treated as neither listed nor quoted, see CG50255. It may not always be clear from the return or computation whether a share or security is quoted.
What is a AIM listed stock?
The Alternative Investment Market (AIM) is a specialized unit of the London Stock Exchange (LSE) catering to smaller, more risky companies. The companies listed on AIM tend to be smaller and more highly speculative in nature, in part due to AIM’s relaxed regulations and listing requirements.
Do you pay inheritance tax on shares?
On your death, the value of your business (the shares) do not form part of your taxable estate and can be transferred free of Inheritance tax. … The reason is that companies were often broken up when the owner died, simply to pay the Inheritance tax bill.
Can AIM shares be held in a Sipp?
Shares listed on the junior market can now be held in Isas. … The prohibition on holding Aim shares in an Isa never made much sense because there was no restriction on holding them in a self-invested personal pension (Sipp).
What is inheritance tax in UK?
Inheritance Tax rates
The standard Inheritance Tax rate is 40%. … The Inheritance Tax charged will be 40% of £175,000 (£500,000 minus £325,000). The estate can pay Inheritance Tax at a reduced rate of 36% on some assets if you leave 10% or more of the ‘net value’ to charity in your will.