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BUDGET: our initial response

On the back of the first Labour Government Budget for 14 years Fundamental Asset Management have put together an initial response relating to AIM investments.

From April 2026, AIM Shares will only benefit from 50% relief as opposed to 100% relief currently. This means AIM shares will be taxed at an effective 20% Inheritance Tax rate from 6th April 2026.

Other Business and Agricultural assets will still benefit from 100% relief for the first £1 million and thereafter will receive 50% relief, again an effective rate of 20%.

It is our understanding that the £1m threshold will NOT apply to AIM shares.

While we would have preferred 100% relief to remain, we are pleased that the relief hasn’t been removed completely, as was speculated, and still offers compelling reasons to invest in AIM.

The AIM market clearly shares our view as we are seeing a significant rally today in our AIM portfolios. Investors had clearly been worried about the potential scrapping of the relief in recent months and AIM had significantly underperformed other markets. The changes made today should also put an end to speculation for several years to come.

In other changes to Inheritance Tax, bands have been frozen for another two years to 2030 likely resulting in more estates paying Inheritance Tax and inherited personal pensions will be subject to Inheritance Tax.

There were also changes to Capital Gains Tax announced. From today, the lower rate will increase from 10% to 18% and the higher rate from 18% to 24%.

ISA allowances have been frozen until 2030. The limit will remain at £20,000 for ISAs, £4,000 for Lifetime ISAs and £9,000 for Junior ISAs and Child Trust Funds.

A further potential (positive) upshot of the Budget in regards to AIM shares was that inherited personal pensions will be subject to Inheritance Tax.

As ever with a Budget, it will take some time to fully digest the details but on the surface, solely looking at it from the perspective of our portfolios, the opportunities look positive.

To discuss the above, please contact us on [email protected] or call 01923 713 890


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The Professional Investor Podcast

The Professional Investor is a new podcast series which goes inside the mind of a UK based professional investor. It explores; the secrets of asset management, gives the inside scoop on the latest developments from the front line of the investment industry as well as analysis and opinion on what is going on in the economy.

For Episode 1 of The Professional Investor Podcast; the professional investor is Chris Boxall. Chris is co-founder and portfolio manager at Fundamental Asset Management.

Chris gives his opinion on the Budget and explains some of the changes he would like to see at the London Stock Exchange.

Chris has 25 years as a professional investor under his belt having worked in New York as well as the UK. Back in 2004, Chris and his colleague Stephen Drabwell brought an American approach to investing over to the UK when they founded Fundamental Asset Management. The firm as well as managing general portfolios, has a focus on smaller companies on AIM including running a specialist AIM for Inheritance Tax Portfolio Service. Chris is the long term editor of the popular research site Investor’s Champion.

    Key topics:
    • The Budget
    • The London Stock Exchange
    • The Financial Times coverage of Chris’ recommendations

Webinar: “How Do You Use AIM For Inheritance Tax Planning?”

Previous Fundamental education webinars

Follow Fundamental Asset on Twitter

Chris Boxall on LinkedIn

Fundamental Asset Management on LinkedIn

Disclaimer: This podcast, all opinions and information are for educational purposes only and do not constitute investment advice. Trading and investing carries a high level of risk and are not right for everyone. If you need financial advice, consult with a regulated financial adviser in your country before making any decisions.

FURTHER INFORMATION

Fundamental’s AIM IHT ISA and General portfolio is a discretionary investment management service where clients can obtain 100% mitigation from Inheritance Tax, benefit from the capital growth and income afforded by the AIM market and retain control of their assets.

You can find out more about AIM ISAs here: ‘AIM ISA Explained’.

Fundamental now offers its standard AIM IHT Growth Portfolio, as well as its newer AIM IHT Income Portfolio service.

All portfolios are managed by the same team of managers and researchers that have delivered exceptional returns since the firm’s founding in 2004.

You can find out more from the link here or by contacting [email protected] or calling 01923 713894.