- Fears IHT relief on AIM shares will be scrapped in Budget triggers sales of AIM shares
- Removing IHT exemption for AIM shares would further harm already-underperforming junior market
The AIM 100 index has now fallen 6.2% in the three months to October 24 2024*, says Bowmore Wealth Group.
In comparison the FTSE 100 fell by only 0.5% in the same period. Concerns that the Budget will see a reduction in the amount of IHT relief that attaches to many AIM shares in the upcoming Budget has driven some investors to sell their AIM shares.
Says Mark Incledon, CEO of Bowmore Wealth Group: “The future of IHT relief on AIM shares is up in the air – and this uncertainty has triggered share sales. Some investors fear that their AIM shares – once considered a ‘safe’ asset to pass to their heirs tax-free – could now incur a hefty tax bill.”
“Removing the IHT exemption will make AIM shares even less attractive to investors. If the Government implements this proposal, then it will be a significant blow to the UK’s market for growth shares.”
“The Government needs to do more to support the junior market rather than less – perhaps by giving preferential tax breaks on income or capital gains from AIM shares. Tax reliefs pay an important part in making the UK’s small listed companies an enticing prospect for investors.”
Incledon says that AIM has a history of feeding successful companies to the Main Market. There is a long list of AIM companies that have become major listed companies – examples include soft drinks producer Fevertree, aerospace manufacturer Melrose and insurance provider Hiscox. Others have been acquired in multi-billion pound deals, including EQT’s £2.2bn acquisition of videogame developer Keyword Studios.
Says Mark Incledon: “AIM has a strong track record of nurturing dynamic companies that go on to achieve high valuations. AIM is an asset for UK plc – the Government should be careful to not introduce measures that’ll harm the market.”
