Business Relief on AIM shares that become listed

Client holds AIM shares but what happens if it becomes a listed company? Grace period?

Didn't find your answer?

Wonder if anyone can shed light on this as I've scoured the IHT manuals and can't find a reference.

A gentleman has been in to see me and holds approx £1m of shares in an AIM listed company. He wants to leave these to the children in his will so as to make use of the Business relief.

His solicitor has suggested that there is a 3 year "grace period" if the AIM shares were to become re-listed on the FTSE, but I cannot find reference to this anywhere. The idea being that the shares could still qualify within that period before consideration would have to be given to selling.

Can anyone confirm this is a "thing" and if so, point me in the right direction?

Replies (5)

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paddle steamer
By DJKL
19th Feb 2020 11:47

Could solicitor be confused re three year grace period and REITs?

https://www2.deloitte.com/content/dam/Deloitte/uk/Documents/tax/deloitte...

Sorry cannot be more helpful but struggling to see how any such relief might be granted.

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By DuncanM
24th Feb 2020 12:02

Could the solicitor also be confused about the use of s107 IHTA 84 which allow a 3 year window for replacement of business assets? This would not be the case if the AIM shares became listed (or the company no longer qualified for some reason), as they would lose their BPR status at that point and s107 would be denied on a subsequent sale and reinvestment into other qualifying assets.

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Tony Granger
By TonyGranger
24th Feb 2020 12:08

When a qualifying (one that satisfies the requirements for IHT relief after shares are held for 2 years) AIM company moves to the main market business reliefs for IHT purposes are lost. One may have to sell shares and repurchase AIM qualifying shares. Replacement relief allows you to take the period of ownership in the first company to contribute to the 2 year qualifying period in the second company. If you sell AIM stock after 2 years then you have 3 years to invest in qualifying stock - but you must be invested at the point of death.

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Replying to TonyGranger:
paddle steamer
By DJKL
24th Feb 2020 12:37

Thanks- always good to learn something new, appreciated

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Replying to TonyGranger:
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By norstar
24th Feb 2020 12:46

That's what I read, but wondered if I was missing something. All good. I've confirmed this to the client. Thanks for responding.

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