How to invest in business relief qualifying AiM companies

It’s no surprise that over recent years financial planners have started using AiM portfolios as a mainstream planning tool for IHT planning.

Planning opportunities that combine AiM with ISA portfolios have become increasingly popular since the introduction of the legislation in 2013.

Wealth Preservation vs Performance

Wealth preservation is at the forefront of our AiM portfolio strategy. That’s why we take a very cautious approach and we:

• always remember that your client wants to protect their capital for the next generation(s) of their family;
• apply careful stock selection criteria to our portfolio;
• combine this with risk management techniques to ensure that capital grows but not at any cost; and
• offer the most diversified portfolio of 40 companies.

Over recent years powerhouse brands such as ASOS and Fevertree, have helped to drive excellent returns to investors. However, the market isn’t without its risks, as recent failures like Conviviality demonstrate.

We believe that by limiting exposure to any one stock to a maximum of 5%, our portfolio can protect investors from downside risk.

How We Do It

For a company to be included in our portfolio it would have to demonstrate at least 5 of the following attributes:

1. Balance sheet strength.
2. Acceptable market valuation and liquidity.
3. Ability to pay dividends.
4. Uncomplicated business model that is likely to survive changing fashions.
5. Management equity commitment.
6. Quality of shareholder base.

Planning Ideas

ESP AiM can be used to increase tax-efficiency and some planning ideas our clients have used include:

• ISA transfers
• Additional Permitted Subscription (APS) transfers
• Portfolio consolidation
• Using annual ISA allowance