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Industry wants IHT clarity over AIM stocks in Isas

George Osborne 480

The investment industry is calling on the Government to clarify whether Alternative Investment Market shares will remain exempt from inheritance tax when bought through an Isa wrapper.

In the Autumn Statement last week, chancellor George Osborne revealed the Government will consult early next year on whether investors can buy stocks on equity markets for small firms, such as Aim, within an Isa.

Most Aim shares are subject to business property relief, meaning owners pay no inheritance tax on them if they are owned at least two years before they die. But the Government did not confirm whether BPR will still apply to shares held within an Isa.

Tax Incentivised Savings Association technical director Peter Shipp welcomes the Government’s “turnaround” but says the inheritance tax exemptions need clarity in the consultation.

He says: “The Government has always been concerned that people investing in Aim stocks receive other tax benefits. There could be proposals to limit these benefits, as well as extending Aim stocks to be eligible through Isas. It would need to be clarified in a consultation.”

Octopus Investments offers the Octopus AIM Inheritance Tax Service and two AIM VCTs. Tax product manager Mark Williams says it would be a “leap of faith” at this stage to say that an investor holding AIM stocks in their Isa will benefit from inheritance tax relief.

He says: “As a wrapper, an Isa does not provide an automatic IHT exemption. And not all AIM shares are eligible for BPR. Until the Government reveals the full extent of its proposals, we will have to wait to see.”


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