Aim shares1 May 2023 11:58
Are inheritance tax free , if this stretches on many more years at least my kids will be ok . “Investing in small companies can help
If you buy shares listed on the Alternative Investment Market (AIM), they are free from inheritance tax once you have held them for two years.
Invest successfully and the savings could be huge, as any assets above the inheritance allowances are walloped with a 40 per cent tax bill. However, the inheritance tax benefit is a reward for taking considerable risk by investing in small, often untested UK-listed companies.
Therefore this approach is only right for experienced investors who understand the risks and can afford to lose money should it not work out.
AIM is the London Stock Exchange's market for small and medium-sized companies in their growth stage. Inevitably these companies are much riskier to invest in than those that have been established for a long time.
They are more likely to go bust, or see their values plummet. For example, the share price of AIM-listed outsourcing group iEnergizer collapsed last week, when it announced it was delisting from the exchange. That will have left some investors nursing losses and unable to trade their shares as easily.
But equally, because they are still in their infancy, AIM companies are more likely to see rapid growth.