Individual Savings Accounts (ISAs)
ISAs allow you to invest in either stocks and shares or cash, while benefiting from tax-tree income. In addition, any capital growth is not subject to capital gains tax. An ISA is a wrapper in which you can shelter your savings before transferring existing investments from tax.
However, you may not be aware that the value of investments and cash held in ISAs are usually counted as part of your taxable estate – so if you want to pass these ISA assets to your family when you die, it may be subject to inheritance tax a 40%.
Since 2013, companies’ quoted for AiM have been eligible to be held in an ISA. You can transfer part or all your existing ISA or open a new ISA when you chose to or invest in the Service. This means you can derive even greater tax benefits by sheltering your investments from income tax, capital gain tax and IHT.
Transferring an existing ISA
The minimum initial subscription to the Service is currently £20,000. This means you can use this year’s annual ISA allowance to set up your Stellar AiM IHT Service. You can also transfer any existing ISAs you hold, however it can take up to six weeks for transfers to take place. You should also note that other ISA providers may charge penalties or fees for transferring money.
Please check before you transfer. If you hold existing ISAs that do not qualify for IHT relief, these can be transferred to the Service while keeping all the ISA benefits.
For IHT relief, the two-year qualifying period
will only start once your funds are invested
in the underlying AiM companies. Until we invest your funds, you won’t be exposed to the market, so any rises or falls during this period will not affect your investment. Each year you may subscribe up to the maximum ISA limit or transfer that amount from a GIA account to an ISA account within the Service. The minimum top-up is £1,000.
Additional Permitted Subscriptions for ISAs
The additional permitted subscription was introduced in 2015. It allows a surviving spouse or civil partner to inherit an ISA allowance and make further subscriptions alongside their own ISA allowance. These can be up to the value of the deceased’s ISA at death, or when the ISA stopped as a continuing account if death was on or after 6 April 2018.
Key documents
Supporting documents
Why our AiM Service is different
Performance matters
To maintain investment performance integrity, we are one of the very few AiM IHT managers who will cap the fundraising strategy. In the trade-off between maximising funds under management or investor outcomes, we are clear who takes priority.
Size matters
By limiting capacity we are able to target some of the most mispriced companies on AiM. Our ‘sweet spot’ is market capitalisations of £250m and below, where stocks are priced less efficiently more often and to a greater extent than larger stocks typically are. However, we are not dogmatic and can, and will, invest in larger sized companies but only where the risks/ reward ratio in our view is compelling.
Tomorrow’s winners, not yesterday’s
By targeting the smaller end of companies on AiM, we believe we can benefit from a boost to returns. As a company grows both its earnings and market capitalisation, larger institutions can start buying the stock which typically increases the company’s price/earnings ratio. This re-rating plus earnings growth should help to deliver superior returns.
Excellent Value
There should be no compromise between fees and service. Our charges are transparent, highly competitive and specifically structured to maximise investor performance.
Rigorous risk control
We remain nimble because we are constantly mitigating the three key equity risks: earnings, valuation, and financial (balance sheet) risk. In addition, we run strict sector, factor and stock position limits to ensure robust diversification across the Service of up to 40 companies.
Founders’ mentality
We target companies that are founder-led, who have the ‘owner’s eye’ and run the business with a longterm
view. There is no better alignment of interest than having management own a significant stake in the business.
Growth and Value factors
While the two common factors, Growth and Value, are intrinsically linked, they perform very differently depending upon wider economic, interest rate, and inflation cycles. We will always have a duel exposure to both factors which helps to reduce our portfolio volatility.
Institutional rigour, without the straightjacket
With a well defined and tested investment process, our specialist and highly experienced AiM team operate within a well-structured and proven framework, while retaining an independence of thought and unburdened by an overly bureaucratic approach. What matters is what works.
Portal access
All investor reports are available to download or view on-line providing live valuations, transaction history, and historical portfolio performance.
ESG
We believe sound ESG analysis should be looked at holistically, incorporating both quantitative and qualitative factors, to form the most rounded view. ESG is an embedded part of our investment process, identifying both ‘strivers and drivers’.
The ARC IHT Portfolio Index
The ARC IHT Portfolio Index (“AIP”) is a Sterling denominated index compiled by Asset Risk Consulting research (ARC) to be used by investors and their advisers in assessing the performance of a discretionary portfolio within a specialist mandate designed to mitigate IHT liability through investment in stocks that are expected to qualify for Business Relief.
The AIP Index provide insight into the actual returns being generated by discretionary IHT portfolios, net of fees, based on thousands of Sterling denominated IHT portfolios submitted by participating investment managers.
Stellar Asset Management was a founding member of the AIP Index, believing passionately that returns data should only comprise actual IHT portfolio performance, free from any “model” or “synthetic” data which often lack true representativeness.
For the latest quarterly ARC statistics please click here.
For more information on ARC please visit https://www.assetrisk.com/research/the-arc-indices/
Platform Services
The Stellar AiM IHT Service is available directly or via the following major wrap platforms – providing an alternate way to invest. Suitable for ISA or APS transfers, and supported in an ISA or SIPP.
