What a great title…which is partly true if you currently hold the Equilibrium AIM portfolio! One of the companies in our AIM portfolio of 30 stocks is the Brewery Young and Co (hence the 40% saving).
The Alternative Investment Market (AIM) can be a very useful investment to help mitigate an inheritance tax liability. Investing in smaller companies that are not listed on the main FTSE market could offer a range of potential benefits and great performance. This will depend on your individual circumstances, and is obviously not without risk, but it could be an option to consider when looking at making your financial plan for the future.
The potential 40% tax saving comes from the fact that business property relief applies to any qualifying AIM investment, which will be classed as being outside of an estate after two years.
The Equilibrium AIM portfolio can be held in an ISA as well, which can also be useful for tax efficient growth. Another benefit of the portfolio is having no bias over the stocks we hold as we only choose the top 30 dividend paying companies; the simple idea behind this being that if a company is paying a dividend then it is in profit.
There are no extra costs from a management point of view and the benefits can also pass directly from spouse to spouse on death with no break in the two year qualifying period.
We are pleased to see that the performance for our AIM portfolio has been above internal expectations over our first year, just remember that investing in smaller companies also carries a far higher risk and therefore is likely to only be appropriate for where there is IHT liability to mitigate.
The information provided through the Equilibrium website is based on our opinion and is for general information purposes only. It is not, and should not be construed as financial advice.
You should be aware that the value of an investment can go down as well as up, and no guarantees as to the future performance, income or capital growth are given expressly or by implication.