UK-based Stellar Asset Management (Stellar AM) has launched an Aim Isa portfolio to help investors reduce inheritance tax obligations while gaining exposure to the UK’s smaller companies.
The new portfolio will integrate the tax advantages of an individual savings account wrapper with the potential IHT benefits of an Aim portfolio, Fundweb has reported.
Known as Aim IHT Isa, the portfolio will be managed in partnership with stockbroker and specialist Aim investment manager Pilling & Co and offers investors with two insurance options to reduce risk.
The first insurance option protects against loss from the AIM ISA investor passing away within the two-year minimum holding period required for the shares to become IHT-exempt, while the second provides downside protection on the amount invested.
The recent legislation which allows investors to hold all or part of their Isa in Aim shares will enable the investment to be free of IHT liabilities after two years.
Jonathan Gain, CEO of Stellar Asset Management, said: "Many Aim companies have tremendous growth potential but also greater volatility than, for instance, the FTSE 100. Because this is an IHT portfolio, a conservative investment strategy to reduce volatility is a fundamental principle."
"Aim shares are now one of the most tax-advantaged of all investments since the majority of them benefit from business relief or business property relief. This means that qualifying shares are IHT-exempt once they have been held for two years. Importantly, it also leaves investors with access to income and capital should they need it in the future," he added.