TAX PLANNING tool offers capital growth based on a portfolio of aim and ofex-listed stocks
The private clients team at Edinburgh Fund Managers (EFM) has launched a service designed to reduce potential inheritance tax (IHT) liabilities by investing on Aim and Ofex.
Investors in the Edinburgh iht Investment service will receive a portfolio of qualifying Aim and Ofex stocks. This will be constructed to provide capital growth and at the same time ensure a high proportion of wealth can be passed on without being subject to the 40% tax rate.
As most Aim stocks qualify for business property relief, their holdings are exempt from IHT liability provided the shares are held for at least two years.
Unlike direct gifts, which must be gifted at least seven years before the death of the person, making the gift to be considered exempt from IHT, the assets held within the Edinburgh service will be excluded from an estate if held for two years.
In addition, holdings in Aim shares qualify as business assets for capital gains tax purposes and benefit from taper relief. This effectively reduces CGT on them to 10% on assets held for two years or more.
Each portfolio in the service will consist of 20-30 companies and will cover a range of sectors. The approach will be to minimise risk by investing the majority of the portfolio in profitable, established Aim companies with good growth potential.
The portfolio will be reviewed annually by an independent expert to ensure holdings are eligible for business property relief.
By investing £100,000 into the IHT service, assuming a rate of growth of 7% over a five-year period, the estate would save £56,102 in inheritance tax, compared with a non-Aim portfolio of identical value, according to EFM.
Norman Yarrow and Alastair Conn from Northern Venture Managers, the specialist venture capital arm of EFM, will work on the service with the EFM private clients team, which has expertise in managing discretionary portfolios. Minimum investment in the service is £100,000 and there is a 5% initial charge and a 1.5% annual management fee. Commission is 3%, including 0.25% trail.
Contact: 0131 313 1000.
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