New research with 100 UK financial advisers and wealth managers by TIME Investments shows that 85% plan to increase their use of AIM-listed companies that qualify for Business Relief (BR) to help people reduce their liabilities.
The findings come as Inheritance Tax (IHT) receipts reached a record £7.1 billion in 2022/23, compared to £6.1 billion in the previous financial year.
The research highlighted the growing popularity of AIM as an IHT planning tool. Almost three-quarters (72%) of respondents said that 40%-60% of their clients aged over 50 currently hold BR-qualifying AIM companies in their investment portfolio. This is a significant increase compared to three years ago when only 43% said between 40%-60% of their clients held BR-qualifying AIM stocks and 39% said less than 40% of their clients held them.
The research reveals the top five most important factors advisers and wealth managers look for when choosing different AIM funds and services. Of primary importance is genuine active management through a qualitative investment approach, the second is funds that invest in larger and more established companies, and the third is funds that invest in profitable and dividend-paying companies.
This is followed by an AIM investment track record of over five years and services that invest in BR-qualifying companies and therefore offer the potential IHT savings.
The research also showed that the majority (95%) of respondents have conducted IHT planning on an investment platform and that 92% would consider using an AIM BR service on the platform in the future to reduce their clients’ IHT liabilities.
Raymond Greaves, Head of Equity Funds, at TIME Investments said:
“Our research shows that advisers and wealth managers are increasingly turning to AIM as a tool to help mitigate the ever-increasing IHT burden. Using Business Relief qualifying AIM investments looks like an untapped opportunity, as many investors over 50 do not yet have these holdings in their portfolio.”
TIME:AIM is an IHT planning service that offers a carefully selected and professionally managed portfolio of BR-qualifying AIM companies, allowing investors to obtain 100% exemption from IHT after just two years.
Our research suggests that TIME:AIM could be a good solution for wealth managers given it is an actively managed service, specifically focusing on the larger, most profitable and highest quality AIM companies, backed by TIME’s proprietary systematic screening process.
The shares are also ISA qualifying, which makes the service ideal for advisers looking to transfer their clients’ ISAs into a BR-qualifying investment.
