AIM
AIM Index Explained
Investing in exciting, ambitious businesses offering excellent investment opportunities, combined with attractive tax benefits.
What is AIM
The FTSE AIM (formerly known as the Alternative Investment Market) is the London Stock Exchange’s growth market. It was created to help smaller companies raise the capital needed to scale. Also referred to as London’s junior market, AIM replaced the Unlisted Securities Market (USM) and began operating in June 1995 with just ten companies listed and a combined market capitalisation of £82.2m. AIM has grown to encompass around 690 companies and a combined market capitalisation of £70 billion (November 2024). AIM is often considered the most successful growth market in the world.
Why was AIM started?
AIM was created to serve smaller companies that sought to seek capital to grow but couldn’t afford the costs associated with listing on the London Stock Exchange’s Main Market or could not meet the stringent requirements needed to float. The Main Market requires companies seeking to float to have existed for three years, to have a market value of at least £700,000, to be willing to float a minimum of 25% of their share capital, and to have enough working capital for at least one year’s trading. AIM does not have these requirements which means that smaller, more entrepreneurial companies are less likely to be put off by floating on AIM.
FREE DOWNLOAD
Download our AIM for Inheritance Tax Report!
This FREE report explains how investing in good quality AIM companies can help you avoid Inheritance Tax and potentially substantially increase your wealth. Download the report.
What companies list on AIM?
Companies looking to float on AIM typically look to raise between £1m and £50m via an AIM admission. While this may seem small, there have been some notable larger raises that exceed £100m. And, while many companies use AIM as a springboard to the Main Market (several hundred companies have made the move), there are still many companies listed on AIM with market capitalisations of over £1 billion. This list includes Fever-Tree, Jet2 and YouGov, all of which have delivered significant returns to investors who invested early on and have decided to remain on AIM, despite their size.
Holding AIM Shares in an ISA
Since 2014 investors have been given the opportunity to add AIM-listed shares into their stocks and shares ISAs. The appeal of paying no Capital Gains Tax at disposal, and paying no income tax on dividends, has seen a steady increase in AIM shares being held in ISA portfolios.
Inheritance Tax (IHT) relief
Many AIM companies will qualify for Business Relief (formally referred to as Business Property Relief), which offers up to 100% Inheritance Tax relief on ‘Transfers of Value’. Transfers of Value come into play when a family member passes away or where the shares have been transferred by way of a lifetime gift within the previous seven years. The full relief is only applicable for certain unquoted companies. To benefit from Business Relief investors must invest in the shares directly, as relief is not available through investment via funds. Discretionary portfolios created by wealth managers on your behalf also qualify.
What are the risks?
Many Alternative Investment Market-listed companies are still in their earlier stages, so some of the risks associated with investing in startups can be applied here. While some companies listed on AIM do eventually decide to move onto the Main Market, the rate of de-listings on AIM far exceed those on the Main Market.
Visit our AIM IHT Portfolios
Our dedicated AIM IHT Portfolio Services have been producing outstanding results since 2004, significantly outperforming the AIM Index *
AIM IHT Growth Portfolio
Our dedicated AIM IHT Portfolio Services have been producing outstanding results since 2004, significantly outperforming the AIM Index *
