Nicholas Hyett, Investment Manager at Wealth Club said, "There is a perception that pulling inheritance tax relief from AIM might be painful, but would only hit a handful of mega-wealthy investors looking to minimize their IHT bill. That view fails to appreciate the important role AIM plays in the wider UK investing landscape."
AIM companies are young and high risk, but also innovative and fast growing. These businesses can be attractive investments in their own right - with around 17% of the AIM All Share owned by UK investment funds that do not qualify for IHT relief."
In the event that pulling IHT relief from AIM caused significant volatility and saw declines in valuation, these funds, including popular funds from managers like Liontrust and Marlborough, would not escape unscathed.
A tax relief driven AIM-pocalypse would have far reaching consequences. Reputational scarring for the UK smaller companies sector, together with permanently lower valuations on AIM, could make it more expensive for UK small companies to raise capital from public markets.
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