We may be looking ,as part of our IHT etc planning , to acquire AIM share portfolios that qualify re BPR. To this end self assembly may be dangerous as the individuals age (shares cease to qualify etc but they do not notice etc) and buying a managed portfolio service may , despite its fees,be a better route.
If anyone has done this for themselves or with their clients would be happy to receive reviews/observations about any of the providers, or even just general observations re AIM. I know that individually they carry risk (hence portfolio approach) and expect if we knew we had say 20 years left other investments would outpace them such that even after 40% tax they would have been a better investment, but as no idea how long will be invested and given only two year qualification re IHT benefit (taxpayers in their 70s) they do seem a tenable IHT solution.
Thoughts.
Replies (7)
Please login or register to join the discussion.
Why not DIY? It ain't complicated and you'll save at least around 5% in fees & other charges I expect.
I read some research that proved dead share investors make (much) more money than live ones, implying a buy and forget approach is best, especially for the long term.
I agree with your re ladders but doubt you'll find an asset manager cheap enough to make you better off (the whole industry is basally a scam - even the asset managers tell me that) even if say on a worst case scenario 2 out your DIY 12 AIM share BPR portfolio becomes non-BPR qualifying in the long term and don't forget this AIM share BPR relief could be very easily abolished in the next 5 years and that is a much bigger risk in my view.
What then is the IHT answer?
Suggestion 1: don't worry about it. You'll live longer that way - maybe long enough for IHT to be abolished in favour of CGT on death or similar. Who knows.
Suggestion 2. Spend it. You've done enough for your children. (And you can tell them that you are getting 40% tax relief for your holiday/whatever... at least, you can until IHT is abolished in favour of CGT on death or similar.)
Suggestion 3: What you don't spend (and maybe you are genetically programmed to underspend) leave to the SNP/Adopt a Fox/Bladder Health/similar.
If this one-size-fits-all answer isn't for you... if, in short, you want tailored, bespoke advice, then the best advice this forum can give you is to get an accountant. (Tbh, I thought you already had.)
Ideally your accountant should know about IHT. (Choose one that does, ffs.) But don't be surprised if the advice you get includes suggestions you may not feel at ease with - it's obvious that if what you have done so far in life has landed you with an exposure to IHT, and you want to eliminate that exposure, then you have to do something different going forward. And that could be a challenge. (Or of course do something such as leave a slug to charity etc as above. Can be hugely tax efficient.)
Re AIM... Imho there's no threat to AIM without something bigger happening at the same time. Iirc OTS once suggested abolishing APR and BPR altogether, but with a reduction of the tax rates and various other measures all to happen together. Its current proposal package seems better thought through, but I've not spent that long on it - don't see much point at this stage.
What I would say is that, if you're not happy doing the AIM thing until it stops working, you probably shouldn't do it at all. That's not intended as investment advice - just seems commonsensical to me.
It is a bit scary guessing on the components of a home made AIM portfolio, though huge savings could be had compared to buying an exiting fund managers product. Have trawled the internet looking for sample AIM portfolios of shares that qualify for BPR but to no avail. Clearly the large companies listed probably will be a bit less risky and volatile so am considering just going on the stock exchange listing of AIM shares and sorting by size as a start. Also can't seem to find a tool which verifies the AIM shares qualifying for BPR and those not