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The Fundamentals #6 – How long do you need to hold a qualifying stock for it to receive IHT relief?

In the sixth of our series – The Fundamentals – about going back to the basics of investing in AIM shares for Inheritance Tax (IHT) planning purposes, we look at How long do you need to hold a qualifying stock for it to receive IHT relief?

We recently ran a webinar for financial advisers where we answered questions on How to use AIM for Inheritance Tax Planning? We received a number of questions regarding the length of time shares must be held to benefit from IHT relief. With the risk warning that we are not tax advisers as well as that tax benefits depend on circumstances and tax rules can change, we have put our understanding of the rules below.

What is the length of time a Business Relief (BR) qualifying stock must be held so a client’s estate does not need to pay Inheritance Tax?

  • A share (and any replacements) must have been held for at least a total of 2 years and still be held on death.
  • The company must still qualify for Business Relief at the time of the investor’s death.

Does the overall AIM portfolio need to be held for 2 years to claim BR or is it on a share by share basis?

  • It is on a share by share basis.

If a qualifying stock is sold and new qualifying stocks are purchased, does that reset the clock?

  • As long as the whole of the money from the sale of the stock is reinvested, the calendar does not reset.

Does HMRC publish a list of qualifying AIM stocks which, if held for 2 years, would qualify for IHT relief?

  • No, HMRC doesn’t produce a list but this is where using experts such as Fundamental Asset Management comes into play. Not only do we select stocks based on the qualifying criteria but we also keep them under review in case their Business Relief qualifying status changes. It is also worth noting that as well as the potential of saving 40% on IHT, our AIM for IHT portfolio service has seen historical growth that has outstripped other indices and competitors over many years.

For more information about reducing Inheritance Tax by using Business Relief click here.

If you have any questions, please do not hesitate to contact our Business Development Manager Jonathan Bramall via email [email protected] or phone 01923 713 894

The Fundamentals Series

Our Educational Webinars also provide plenty of further information.

Fundamental Asset Management
www.fundamentalasset.com


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The Fundamentals #4 – What is the Fundamental AIM Inheritance Tax Portfolio?

In the fourth of our series – The Fundamentals – about going back to the basics of investing in AIM shares for Inheritance Tax (IHT) planning purposes, we look at: the Fundamental AIM Inheritance Tax ISA Portfolio.

Inheritance Tax planning is not only for those with high net worth. It is a tax which is paid in record numbers (HMRC figures released March 2022) by thousands of people in the UK every year. But it is avoidable with a good Inheritance Tax plan. That is why we would recommend you speak to a financial adviser before making any investment decisions.

The Fundamental AIM Inheritance Tax Portfolio has the objective of obtaining 100% relief from Inheritance Tax, as well as the potential for capital appreciation, by investing into qualifying AIM quoted companies. The Fundamental AIM Inheritance Tax Portfolio is an effective, proven and non-contentious tax planning method which avoids the costs, administration and loss of control associated with forming a trust or gifting.

Growth potential

Holding a Fundamental AIM Inheritance Tax Portfolio means you will benefit from the growth opportunity AIM presents as one of the most successful growth markets in the world.

Inheritance Tax mitigation

A Fundamental AIM Inheritance Tax portfolio achieves 100% mitigation from Inheritance Tax after only two years. Not seven years as is the case through a gifting or trust approach.

Retain access to your assets

Holders of the portfolio retain assets in their own name, which means you will not lose control of your assets and have the freedom to redeem some, or all, of your holdings at any time.

ISA benefits

A Fundamental AIM Inheritance Tax Portfolio can be wrapped in an ISA which means you benefit further from no Income or Capital Gains Tax on growth. An ISA can also be left to a surviving spouse in its entirety tax-free through Additional Permitted Subscription. We explain more about the AIM ISA here.

How do I transfer my existing ISA to Fundamental?

If you are looking to transfer your existing ISA to a Fundamental AIM ISA then all you have to do is complete our application and transfer forms and email them to: [email protected], alternatively please call 01923 713 894 .

Please note, if you withdraw your investments from your ISA instead of transferring them, you will lose your ISA benefits and we will not be able to include them into a new Fundamental AIM ISA if that sum is higher than your current year allowance. Transfers can be made in stock and/or funds (with some exceptions) and cash. To retain previous years ISA allowance, please complete our ISA transfer form. Generally, the ISA transfer process can take anything up to six weeks for transfer proceeds to be received by Fundamental from your previous provider.

Looking for a quote?

Email details to us at [email protected] and we will be happy to pull together a personalised illustration for you.

The Fundamentals Series

If you have any questions, please do not hesitate to contact our Business Development Manager Jonathan Bramall via email [email protected] or phone 01923 713 894

Our Educational Webinars also provide plenty of further information.

Fundamental Asset Management
www.fundamentalasset.com


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The Fundamentals #3 – The perils of exit fees & support for a client’s estate

In the third of our series – The Fundamentals – about going back to the basics of investing in AIM shares for Inheritance Tax (IHT) planning purposes, we look at: the perils of exit fees & support for a client’s estate.

Perils of exit fees

When someone decides to invest, one of the last things they think about is; ‘what are the exit fees if I need to withdraw my money’?

Unlike some of our peers, we don’t charge exit fees. We want people to be with us for the long-term in order to gain from the potential opportunities of our AIM portfolio service, but if someone needs to take their money, we do not think they should be charged for the “privilege”.

Feeling withdrawn?

You can take your money out of your portfolio whenever you need to by contacting us – this is true for AIM IHT portfolios and AIM IHT ISAs. We run flexible ISAs which means you can disinvest and reinvest funds within the same ISA tax year. Money withdrawn may lose tax benefits and could form part of your taxable estate at death. We do not apply a minimum withdrawal amount.

Costs to clients’ estates

In this world nothing can be said to be certain, except death and taxes” Benjamin Franklin famously wrote in 1789. Whilst our AIM IHT portfolio service is designed to try to disprove the second part of the saying by saving on the Inheritance Tax a client’s estate must pay; we all know that death will eventually catch us all. When death does come, we support the Executors of the estate. At a difficult time, we provide the information HMRC requires at no additional charge. Again, sadly, not all AIM asset managers provide this support.  For more information about reducing Inheritance Tax by using Business Property Relief click here.

The Fundamentals Series

If you have any questions, please do not hesitate to contact our Business Development Manager Jonathan Bramall via email [email protected] or phone 01923 713 894

Fundamental Asset Management
www.fundamentalasset.com


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ISA deadline reminder

The ISA deadline for 2021/22 is April 5th, the tax year end. However, the latest date for receipt of ISA applications is 31st March. Please contact us if you would like to discuss opening an AIM IHT ISA.

You have until the deadline to invest this year’s £20,000 savings allowance so as to benefit from no tax on dividends, interest and capital gains.

As we wrote about in our back-to-basics series The Fundamentals #2: How to use ISAs for Inheritance Tax planning; ISAs per se are not Inheritance Tax free, but they can become so by using a service such as the Fundamental Asset Management AIM IHT ISA Portfolio Service.

For more information, click here or watch the video below:

Using ISA and AIM for IHT

ISA DEADLINE & IHT PLANNING REMINDER

If you have any questions, please do not hesitate to contact our Business Development Manager Jonathan Bramall via email [email protected] or phone 01923 713 894

Fundamental Asset Management
www.fundamentalasset.com


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The Fundamentals #2: How to use ISAs for Inheritance Tax (IHT) planning?

 

In the second of our new series about going back to the basics of investing in AIM shares for IHT planning purposes, we look at: How to use an AIM ISA to reduce Inheritance Tax.

Are ISAs Inheritance Tax free?

ISAs per se are not Inheritance Tax free, but they can become so by using a service such as the Fundamental Asset Management AIM IHT ISA Portfolio Service.

What is an AIM ISA or AIM IHT ISA portfolio?

An AIM ISA portfolio or AIM IHT ISA portfolio, as the name suggests, is a portfolio of AIM shares, listed on AIM, the junior market of the London Stock Exchange. AIM shares which meet the Business Property Relief rules should benefit from IHT relief and can be held in an ISA. We explain more about Business Property Relief here.

How does it work?

Fundamental Asset Management purchases and manages a portfolio of eligible AIM ISA shares on a client’s behalf – we are experts in assessing Business Property relief eligibility. The portfolio of shares, including capital growth, can be passed on free of IHT after two years, provided the shares are still held on death and still eligible for relief.

Do all AIM shares benefit from IHT relief?

No. At the end of 2021 there were 852 companies on AIM. We estimate that approximately 600 qualify for Inheritance Tax relief and, of those, approximately 300 meet our investing criteria.

When is the ISA deadline for 2021/22?

The ISA deadline for 2021/22 is April 5th, the tax year end. However, the latest date for receipt of ISA applications is 31st March. Please contact us if you would like to discuss opening an AIM IHT ISA.

Can an ISA from a previous year become an AIM IHT ISA?

Yes. You can transfer existing ISAs to Fundamental Asset Management:

  • Protecting your ISA wrapper benefits
  • Gaining Inheritance Tax relief after 2 years
  • Taking advantage of the potential growth AIM offers

For more information see our website page AIM ISA Explained

Is now a good time to invest?

As is normally the case when stock markets face uncertainty, the share prices of smaller companies, and particularly those on AIM, have sold off significantly in the first quarter of 2022.

We believe in focusing on the fundamentals of a company, and recent results and updates from many AIM companies we follow have been extremely positive. The recent sell-off therefore presents an excellent opportunity to consider investing in a host of exciting, growing AIM companies, at far more modest valuations than a few months ago.

  • See our previous blogs for more information. AIM market sell-off – what we are doing.
  • Listen here to a podcast featuring Chris Boxall, Co-founder of Fundamental Asset Management discusses the latest market sell-off and considers what investors should be doing.

If you have any questions, please do not hesitate to contact our Business Development Manager Jonathan Bramall via email [email protected] or phone 01923 713 894

Fundamental Asset Management
www.fundamentalasset.com


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Introducing The Fundamentals Series

Our last Blog here covered a stock market sell-off and what we are doing. This week we are doing things a bit differently.

Recently, we have received requests to go over some topics from the beginning to assist people who are trying understand what we do at Fundamental Asset Management as well as what AIM is, what opportunities it provides and how it can be used to help reduce Inheritance Tax (IHT).

Over the coming weeks, we will be going back-to-basics focusing on the fundamentals (pun intended!) of the AIM IHT Portfolio Service and indeed Fundamental Asset Management itself. We will be looking at how AIM could provide returns in the medium to long-term that put other investments in the shade as well as how Business Relief can be used for estate planning as well as some frequently asked questions around costs and a number of practical processes.

This week, The Fundamentals brings you a video we have put together; Fundamental Asset Management – An Introduction.

Topics covered include:

  • Who Are We?
  • What is AIM?
  • AIM in 2021.
  • AIM for outperformance.
  • Business Relief & AIM – How it works.
  • AIM IHT Investment Process – Investable Universe.
  • AIM Investment Process – Core/ Satellite portfolio approach.
  • AIM IHT Investment process – the issues!
  • Benefits of a Portfolio – Not a Fund.
  • AIM in 2022 – Difficult Start to the year.
  • 2022 Opportunities so far.

In this video presentation, Chris Boxall, co-founder of AIM specialist investment manager Fundamental Asset Management, provides an introduction to the Fundamental AIM IHT portfolio service. The presentation covers Fundamental’s investment process and issues to be aware when investing in AIM for Inheritance Tax planning purposes. Chris also offers his thoughts on the outlook for AIM in 2022.

We hope you find it useful. If you have any questions, please do not hesitate to contact our Business Development Manager Jonathan Bramall via email [email protected] or phone 01923 713 894

Fundamental Asset Management
www.fundamentalasset.com