The Lemon Fool

I’ve just come across this. Apparently AIM ISAs are inheritance tax free.

Does anyone invest in one that can provide their take/any more information.

Does it need to be a specific AIM ISA or can you invest in a regular ISA but just choose AIM investments

Are there any AIM index funds?

I’ve got a sizeable inheritance tax bill and looking for ways to reduce this.

Appreciate AIM will be a riskier investment so would not move everything and the farm to this but would be good to put some of my investments in an inheritance tax free wrapper.

'Most'........ NOT all AIM shares are free of IHT if held for 2 years

held for 2 years, within an ISA or not...doesnt matter
does not need to be a specific AIM ISA

yes there are specific AIM funds,,,but IHT exemption applies to actual companies,,,no need to be in a fund

1) VIP keep a note of exact aquisition date and terms...will be required by executors in order to claim exemption

2) AIM shares are more risky than main indexes..........

3) PETs are a safer bet subject to your age and healt

If there's a sizable inheritance tax bill, they'll likely be very fortunate. Personally, I'd not worry about it.

But, some retired ppl I know seem to be spending, holidays and gifting, ... and care home fees. Think that's the more usual route by getting estate value down under £1m combined allowance threshold.

You have to own qualifying AIM shares personally, not in a Fund. I believe the 'funds' that organise this actually buy the individual AIM shares in your own name (or in your ISA) and charge quite high fees.

Anyway, I think it highly unlikely the AIM share IHT loophole will survive under an incoming Labour government and that would probably result in a sharp fall in AIM shares.

The risk outweighing all risks with AIM shares IMHO is if Gov removes the IHT exemption re same, AIM market valuations are I believe propped up with the inherent relief, if it were to be removed what would the true market valuations be? (Especially given all the recent rumors that HMG wants to play around with IHT, though nothing happened at last "budget", however accountants are again getting their knickers in a twist re the next one- 6th March I think)

mutantpoodle wrote:'Most'........ NOT all AIM shares are free of IHT if held for 2 years

held for 2 years, within an ISA or not...doesnt matter
does not need to be a specific AIM ISA

yes there are specific AIM funds,,,but IHT exemption applies to actual companies,,,no need to be in a fund

1) VIP keep a note of exact aquisition date and terms...will be required by executors in order to claim exemption

2) AIM shares are more risky than main indexes..........

3) PETs are a safer bet subject to your age and healt

Thanks. What’s a PET

banjocountry wrote:Thanks. What’s a PET

Potentially Exempt Transfer.

Basically, a technical term for a Gift that is above the amount you are allowed to give within your annual IHT allowances (ie small gifts of under £250, annual £3k allowance, plus wedding gifts, etc see https://www.gov.uk/inheritance-tax/gifts ). Depending upon quite how large it is, there are different rules, but for the most part it is a gift you make that after 7 years is no longer counted as part of your estate.

Paul

Charlottesquare wrote:The risk outweighing all risks with AIM shares IMHO is if Gov removes the IHT exemption re same, AIM market valuations are I believe propped up with the inherent relief, if it were to be removed what would the true market valuations be? (Especially given all the recent rumors that HMG wants to play around with IHT, though nothing happened at last "budget", however accountants are again getting their knickers in a twist re the next one- 6th March I think)

Yes I sold all my AIM shares last year. It felt like I was passively waiting for an accident to happen. Luckily I made some decent profits on them.

Labour might get rid of the exemption and the Tories might abolish IHT or lower the rate. Either way AIM shares take a bath.

Lootman wrote:

Charlottesquare wrote:The risk outweighing all risks with AIM shares IMHO is if Gov removes the IHT exemption re same, AIM market valuations are I believe propped up with the inherent relief, if it were to be removed what would the true market valuations be? (Especially given all the recent rumors that HMG wants to play around with IHT, though nothing happened at last "budget", however accountants are again getting their knickers in a twist re the next one- 6th March I think)

Yes I sold all my AIM shares last year. It felt like I was passively waiting for an accident to happen. Luckily I made some decent profits on them.

Labour might get rid of the exemption and the Tories might abolish IHT or lower the rate. Either way AIM shares take a bath.

I agree- of course Cons might just be teasing us and end up doing Hee Haw. Frankly if a choice of AIM shares or farmed/actively managed agricultural land/woodland I would go for the fresh air-they do not build land these days.

Charlottesquare wrote:

Lootman wrote:Yes I sold all my AIM shares last year. It felt like I was passively waiting for an accident to happen. Luckily I made some decent profits on them.

Labour might get rid of the exemption and the Tories might abolish IHT or lower the rate. Either way AIM shares take a bath.

I agree- of course Cons might just be teasing us and end up doing Hee Haw. Frankly if a choice of AIM shares or farmed/actively managed agricultural land/woodland I would go for the fresh air-they do not build land these days.

Thanks. Is all land IHT exempt or only that being farmed?

One of my relatives has land that’s used for horses to be kept and ridden. Would something like that qualify for IHT exemption?

banjocountry wrote:

Charlottesquare wrote:
I agree- of course Cons might just be teasing us and end up doing Hee Haw. Frankly if a choice of AIM shares or farmed/actively managed agricultural land/woodland I would go for the fresh air-they do not build land these days.

Thanks. Is all land IHT exempt or only that being farmed?

One of my relatives has land that’s used for horses to be kept and ridden. Would something like that qualify for IHT exemption?

It has to be land used for agricultural purposes. Grazing of horses does not count as agriculture unless they are being kept for genuine farm work. There's also an exception for stud farms that breed and graze racehorses.

See https://www.gov.uk/guidance/agricultura ... itance-tax and https://www.gov.uk/hmrc-internal-manual ... /ihtm24061

banjocountry wrote:
Thanks. Is all land IHT exempt or only that being farmed?

One of my relatives has land that’s used for horses to be kept and ridden. Would something like that qualify for IHT exemption?

It needs to qualify for Agricultural Property Relief ( i.e, it is part of a farm or a stud ) or Business Property Relief ( i.e. there is some underlying business activity - say a livery stable ) before there is any IHT relief. Just keeping your own horses won't create any relief.