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Fundamental takes Aim for IHT planning

A new inheritance tax planning portfolio service is aiming to offer the advantages of Aim and Ofex investments to IFAs seeking an alternative approach.

Fundamental Asset Management, a recently formed investment firm specialising in the small and mid-cap sectors, says its service offers an effective, non-contentious tax planning method that avoids the costs and risks associated with forming a trust or making gifts.

The service invests in qualifying Aim and Ofex securities, which benefit from business property relief and 100 per cent IHT relief as long as the stocks are held for two years.

Investment will typically be made in 20 to 30 companies, depending on the size of client portfolios. Fundamental says the risk of investing in the Aim market has fallen in recent years, as top-end stocks drop into the system, offering sound performance.

Clients can establish an account through their existing stockbroker or through Fundamental’s broker, e-trade securities. Minimum investment is 30,000. Initial charge is 4 per cent and annual 1.5 per cent.

Atkinson Smith financial development manager Will Palmer says the idea of taking business property relief for IHT purposes is not new but the downside of investing in Aim and Ofex shares is there is a perceived risk in the stocks.

He says: “There has to be a consideration that the portfolios are unlikely to match the investor’s risk profiles. IFAs are not stockbrokers and need to be convinced that such stocks are low risk but they do not always have time to research such services thoroughly and are likely to prefer to stick to investments they are comfortable with.”

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