AIM Shares - Sources of Information

[steveal]

As a retired couple, my wife and I are concerned that some IHT will be required when we pop our clogs.
I have only recently become aware of the potential tax advantages of (some) AIM shares. As a fan of small cap companies in general, AIM shares have the potential to be a winner for us from a few directions.

I discovered that several brokers offer managed portfolios of IHT helpful AIM shares, but often with very high charges.
As I've usually done DIY investing (HYP type, amongst others), I thought DIY might be appropriate for the AIM shares.

One problem I've found is sourcing information on the AIM universe. Can anyone guide me towards a useful forum, website or screening tool?
Any other insights would be much appreciated.

[toofast2live]

Every year Investors Chronicle produce a comprehensive guide to the top 100 AIM shares, with buy recommendations. This would seem to be an ideal start, but I don't know when they will next publish the information. I would imagine it is on their website. Remember, not all AIM shares qualify for IHT relief, but I have found a simple phone call to the company secretary usually answers that question.

[toofast2live]

Just received my IC and believe it or not part one of the AIM 100 is out today. If you're not a subscriber each magazine costs £4.90.

[hiriskpaul]

As a retired couple, my wife and I are concerned that some IHT will be required when we pop our clogs.
I have only recently become aware of the potential tax advantages of (some) AIM shares. As a fan of small cap companies in general, AIM shares have the potential to be a winner for us from a few directions.

I discovered that several brokers offer managed portfolios of IHT helpful AIM shares, but often with very high charges.
As I've usually done DIY investing (HYP type, amongst others), I thought DIY might be appropriate for the AIM shares.

One problem I've found is sourcing information on the AIM universe. Can anyone guide me towards a useful forum, website or screening tool?
Any other insights would be much appreciated.

I to have this on my todo list and have found the same as you - the brokers all charge too much. For the DIY route, I would suggest digitallook.com as a good starting point. Look up FTSE AIM All-Share and you will get a list you can filter. As far as I know HMRC do not keep a list of IHT exempt companies, so toofast2live's tip is good. I have in the past come across a some other paid for web sites which might help, but cannot find the links.

Moderator Message:
Does not seem relevant to "trading my way to a million". moving to more apt board? Raptor.

[steveal]

Thanks for the IC tip - I'll hit WH Smith tomorrow!

Digital look is interesting, but I would like to know of any alternatives (even paid!).
Am I alone in thinking that HMRC could be more helpful?

[Lootman]

One idea is to start with the constituents of the AIM 50 index. These are the largest and most liquid AIM shares, although those are relative terms with AIM shares. Even so, some are fairly large and clearly could be on the senior exchange but choose to remain on AIM for whatever reason. For instance ASOS has a market cap of 4.6 billion.

Start with this list but of course some of these do not qualify for the IHT exemption. In most cases it's easy to work out which ones are excluded - generally those that are investment, finance or property vehicles. If they make real things or provide real services, chances are they qualify. But be wary they are not listed on another exchange, like the US NASDAQ.

http://www.digitallook.com/index/FTSE_A ... ation/desc

From that list and in order of market cap, I hold these in my IHT-free portfolio:

Fevertree
James Halstead
Nichols
Thorpe (F.W.)
Youngs (brewery)
Renew Holdings

I also hold a few tiddlers with the understanding that returns may be all over the place:

Accesso Technology
Majestic Wine
James Latham
Walker Greenbank
James Cropper
AB Dynamics
Portmeirion
Bioventix
Judges Scientific
Flowtech
Zytronic
Avingrans
Crawshaw
Robinson

Although none of them are showing a loss at the moment, which is something of a miracle, but I've held them for a while. Some other things:

1) Sometimes these shares cease to be IHT-exempt because they migrate to a listed exchange, change their business model or get taken over. But you can roll over the value to another exempt AIM share.
2) There is no guarantee that the same IHT rules will still exist when you expire.
3) The elevated risk, obviously - saving IHT because the holdings went to zero is a Pyrrhic victory.
4) A dilemma is whether to hold them in an ISA or in a taxable account. Within an ISA they are totally tax free - no IHT, no income tax, no CGT, not even stamp duty. But you will have some losers and those are useful in a taxable account if you have a lot of pregnant unrealised capital gains elsewhere. And since you intend to hold these until death, CGT should not be an issue (aside from involuntary corporate actions).

PS: If anyone sees one on my list that isn't IHT-exempt, please let me know!

[steveal]

Lootman,

Thanks for the reply. I hadn't seen or heard of the AIM 50. Very interesting and an excellent starting point.
The Digital Look link answers one of my concerns regarding the liquidity of these small companies. Daily trade for 4D Pharma shows only £7,000, for example. That is the worst and the average for the 50 is £2,000,000 daily.

I'll study these 50, get to Smiths for the IC and note the sensible warnings given by all who replied.

By pure coincidence (as I only stumbled on the IHT angle relating to AIM shares yesterday), last week I ordered this book and it arrived today:
https://www.amazon.co.uk/Future-Small-w ... 0857194208
Has anyone read this?

One other potential resource I've come across is this:
http://aimsearch.investorschampion.com/
Money is required for full access, though. They claim to be able to tell which AIM shares are IHT exempt, although Lootman implies it's not beyond mere mortals to sort that out.

[kempiejon]

As a retired couple, my wife and I are concerned that some IHT will be required when we pop our clogs.
I have only recently become aware of the potential tax advantages of (some) AIM shares...

A couple more ways one could reduce IHT, can you give some away now and tuck some money in SIPPs?
Not for IHT planning but I have looked at AIM a couple of times, some you win some you lose - a I have a couple of the larger ones mentioned by Lootman. Remember AIM is a bit wildwest, I was caught and wiped out by an AIM Co. overstating assets, still the other markets can suffer too.

[mc2fool]

I have looked at AIM a couple of times, some you win some you lose...

If you've found it that balanced you're in good shape . The FTSE AIM All Share index, currently at 946.65, is still below its 1996 initial value of 1000, and its total return index is only 3.9% up on its 1997 launch value.

In aggregate AIM has been pretty crap for investors, although there are clearly some big winners. It's definitely a stock pickers market....

[steveal]

[quote="kempiejon"]

"A couple more ways one could reduce IHT, can you give some away now and tuck some money in SIPPs?"

The great advantage of the AIM shares is that we keep control of the money. If things turn bad (illness, long term care etc.) we can sell the AIM shares.
If given away - not too sure...

I'm unsure about SIPPS, but suspect there are serious limits on the amount can be tucked away?

[kempiejon]

The great advantage of the AIM shares is that we keep control of the money. If things turn bad (illness, long term care etc.) we can sell the AIM shares.
If given away - not too sure...

I'm unsure about SIPPS, but suspect there are serious limits on the amount can be tucked away?

The major disadvantage with shares, not necessarily just AIM is if things go seriously wrong there won't be as much left if things turn bad and perhaps your recipients of early inheritance might be able to help. If you're not so sure perhaps they shouldn't even get when you're done?
Indeed SIPPS limit you to a measly few grand each per year.

[steveal]

kempiejon,

All true!
We have already given away substantial amounts to children & grandchildren and will continue to do so. The AIM idea is intended as an additional string to the bow.

Too true about share losses for all sizes. I needn't go much beyond Tesco to illustrate that...
We already have a sizeable investment in various small cap ITs and ETFs. Our intention is to 'convert' some of those in to AIM shares.
I appreciate we are getting into a riskier area, but a somewhat similar type of investment, but with the IHT advantage.

[Lootman]

We already have a sizeable investment in various small cap ITs and ETFs. Our intention is to 'convert' some of those in to AIM shares.
I appreciate we are getting into a riskier area, but a somewhat similar type of investment, but with the IHT advantage.

The risks are considerable, so AIM shares can only ever be a partial solution to mitigating IHT risk. In my case I tried to spread the risk by holding 20 names, and it's worked so far, but I was lucky to buy when the markets were at depressed levels a few years ago. In my experience the return on AIM shares exaggerates the returns of the broader market. If the FTSE-100 is down by 10%, your AIM shares could be down 20% or 30%.

I have about 5% of my investible worth in AIM shares, so need other IHT strategies as well. You can find various discussions about them on the Taxes board.

Also if you look at the old TMF discussion boards (still around, last time I checked) you'll see a number of threads about AIM shares and their IHT-saving potential. You'll also read about a few horror stories. A poster called Carmensfella (don't think he migrated here) used to talk about them a lot.

[PinkDalek]

... Our intention is to 'convert' some of those in to AIM shares.
I appreciate we are getting into a riskier area, but a somewhat similar type of investment, but with the IHT advantage.

The search for qualifying AIM (unlisted) shares came up from time to time at the old "Paulypilot's Pub - Share Ideas".

One such thread was here http://boards.fool.co.uk/james-halstead ... sort=whole (already saved here https://web.archive.org/web/20160513224 ... sort=whole) which developed on from James Halstead.

It may provide further food for thought but, similar to Lootman's comment earlier, beware if they don't qualify or are already a main listing. I note Air Partner featured in one of the replies in error. There may be others!

[PinkDalek]

...

http://www.digitallook.com/index/FTSE_A ... ation/desc

From that list and in order of market cap, I hold these in my IHT-free portfolio:

Fevertree
James Halstead
Nichols
Thorpe (F.W.)
Youngs (brewery)...

Young & Co's Brewery plc (despite no longer being a brewer) would be far higher up that list, if they added the non-voting shares (shown lower down) to the 'A's!

They've only been on AIM since 2005 or so. Formerly a main listing. I remember worrying when they relegated themselves. Thanks to the late and great John Young and family (and some advice from an unnamed Fool way back), I was able successfully to transfer a qualifying Business Property relief holding. One which I acquired back in the early days of CAMRA on the basis of a few too many drinks.

I feel somewhat bereft without it, so I'm now building up my own holding afresh in my Investment ISA , via the now comparatively expensive non-voting shares, but can never hope to achieve what I was fortunate enough to achieve over the last 40 years or so. I've never calculated the IRR and probably wouldn't want to but it is unlikely to be something that can easily be repeated.

Who said Young's Special isn't good for you (mixing up my drinking analogies)?

[Clitheroekid]

Crawshaw

Although none of them are showing a loss at the moment, which is something of a miracle, but I've held them for a while.

This raises an interesting point about what people consider a `loss'.

I'd been watching Crawshaw for some time, as they had been consistently recommended by people I respected, but as usual I missed the boat. Having watched them climb from being a penny share back in 2013 they rose into the 90's within a couple of years, and not buying them simply added to the multiplicity of bruises where I've kicked myself.

However, having gone up like the proverbial rocket they then completed the proverb by coming down like the stick, and were down to around 15p just a month ago (though I see they've doubled since then).

As you say you're not showing a loss I'm assuming you either bought them at below their current price some years ago or that you bought them very recently.

However, If I'd bought them back in 2013 at less than their current price then although I would not on paper have made a loss I would definitely feel as though I'd made a loss, having watch them lose two thirds of their value during my period of ownership, and I would now be viewing them as a bad investment.

I realise, of course, that the `loss' is purely psychological, but do others feel the same about shares that have risen dramatically and then fallen back again?

And what are your current views on Crawshaws' prospects of a sustained recovery?

Incidentally, someone mentioned Carmensfella, and he was responsible for some of the biggest bruises of all when he tipped a company called Lo-Q (now Accesso Technology, which I see you hold) back in 2008. His write-up was very convincing, but as I'd been stung with a couple of AIM shares I dithered as to whether or not to buy at the then price of 31p, and again took the view I'd missed the boat as they steadily climbed, so that I never did buy in. However, I did `invest' £5,000 in my nominal portfolio of shares that I'm watching.

As of Friday they were standing at £17.15, and my (unfortunately nominal) investment was worth £287,300!

Ah well, win some, lose some

[PinkDalek]

...

Incidentally, someone mentioned Carmensfella, and he was responsible for some of the biggest bruises of all when he tipped a company called Lo-Q (now Accesso Technology, which I see you hold) back in 2008. His write-up was very convincing, but as I'd been stung with a couple of AIM shares I dithered as to whether or not to buy at the then price of 31p, and again took the view I'd missed the boat as they steadily climbed, so that I never did buy in. However, I did `invest' £5,000 in my nominal portfolio of shares that I'm watching.

As of Friday they were standing at £17.15, and my (unfortunately nominal) investment was worth £287,300!

Ah well, win some, lose some

I don't have a record of when Carmensfella first mentioned Lo-Q but I do have a bookmark to one of the Mello write-ups. From 17 December 2008:

http://boards.fool.co.uk/mellos-loq-113 ... sort=whole (already saved here https://web.archive.org/web/20120323162 ... sort=whole)

I'm fortunate in that I didn't put them on my Watchlist.

As for Crawshaw, I invested a loseable chunk far too late. Something I do far too regularly. Having subsequently seen them on the way down past 20p, I quadrupled my holding. As you say, on paper, this looks like it may have been a wise move but I've no idea if the share price is merely a reflection of PIs, such as I, boosting the price on little or no news. I'm still slightly underwater and could have cashed in some gains early on but I'm a very LTB&H fool. Sometimes it works and sometimes I feel like a complete idiot.

It is fairly easy to find out at what price Carmensfella first invested. I shan't embarrass him by putting the price on here.

[Lootman]

I'd been watching Crawshaw for some time, as they had been consistently recommended by people I respected, but as usual I missed the boat. Having watched them climb from being a penny share back in 2013 they rose into the 90's within a couple of years, and not buying them simply added to the multiplicity of bruises where I've kicked myself.

However, having gone up like the proverbial rocket they then completed the proverb by coming down like the stick, and were down to around 15p just a month ago (though I see they've doubled since then).

As you say you're not showing a loss I'm assuming you either bought them at below their current price some years ago or that you bought them very recently.

However, If I'd bought them back in 2013 at less than their current price then although I would not on paper have made a loss I would definitely feel as though I'd made a loss, having watch them lose two thirds of their value during my period of ownership, and I would now be viewing them as a bad investment.

I realise, of course, that the `loss' is purely psychological, but do others feel the same about shares that have risen dramatically and then fallen back again?

And what are your current views on Crawshaws' prospects of a sustained recovery?

I said I wasn't showing a loss on any. That doesn't mean I am showing a gain. I bought Crawshaw about 3 years ago, so it's pretty much flat at the minute. But like you say, it's been to the moon and back. I don't really have an informed view on it now that would help anyone. It seems to have a mind of its own and I only check its price every few months. Since this is in my IHT portfolio I intend to hold it until it ceases to qualify for IHT exemption anyway. I don't own AIM shares in the belief that they will make me fabulously wealthy. There are other areas of the markets where I feel I might have an edge - this isn't one of them.

But more generally, yes, I do still feel some sense of personal loss if I pick a winner and then it loses it all again. I had a Chinese aluminium share whose ADR I bought for $20. It went straight up to $70 and I felt smug. Then it went back down to $20 and I was depressed enough to sell it at par. It's now at $13 some years later. As you say, you win some and you lose some.

[steveal]

Here's a relevant article:

http://citywire.co.uk/money/david-kempt ... a1009305/2

Moderator Message:
Citywire require you to be registered to read the article. It is free to register. Though my firefox browser seems to be in a loop so cannot register myself (for now). Raptor.

[jackdaww]

i am not afraid of AIM , and hold these --

breedon
burford
conviviality
crystal amber
epwin
touchstone
manx
redde
renew
watkinjones.

no total disasters (so far)

touchstone are 30% down

most pay dividends

most have done well (so far) , some very well - burford.