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A B C D E F G H I J K L M N O P R S T V W Y

Inheritance Tax Reliefs - Are there stormy seas ahead for AIM shares?

Inheritance Tax Reliefs - Are there stormy seas ahead for AIM shares?
Wednesday 6th December 2017

As most people are aware the Government currently grants Business Relief at 100%, or in a few cases at 50%, for qualifying assets on lifetime gifts or on death.

When Inheritance was introduced in 1984 these reliefs were 50% and 30% respectively, but were then extended to their current rates in the spring budget of 1992.

Many people see the justification of these reliefs applying to family owned trading businesses, where there is a high level of risk and personal involvement. However with increasing pressures on taxation revenue, the rate of relief available to Aim shares and similar investment opportunities are likely to come under scrutiny.

There is now a far larger market in terms of capitalisation; greater sophistication from investment managers in diversifying AIM portfolios and minimising downside risks; a strong recent history of share price performance; improved levels of trading and liquidity in the stocks; and flows of money into this market with the sole intention of capturing the taxation benefits.

It would be a fairly easy step for a chancellor of any political hue, to downgrade AIM shares from 100% to 50% relief and which is unlikely to prejudice their future political ambition in the eyes of most of the electorate.


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