The Association of Investment Companies (AIC) has collated views from managers of AIM focused VCTs on the likely impact on the AIM Market of the abolition of stamp duty on companies listed on this market.
Oliver Bedford, co-manager of Hargreave Hale AIM VCTs, says: “It is often said that SMEs are the lifeblood of the British economy. With 1,100 companies, AIM is home to three times as many companies as the FTSE 350. Many of these are developing the technologies and products of the future and looking for growth capital through AIM. The announcement by the Chancellor acknowledges their contribution to the UK and will, we hope, encourage more investors to consider an investment into this vibrant market.”
Paul Jourdan (pictured), chief executive of Amati Global Investors, managers of Amati VCT, says: “We see the abolition of stamp duty on AIM as excellent news for growth companies and entrepreneurs in the UK. More important than the reduction of frictional costs and possible re-rating of some of the more neglected parts of the market, we think this move will be an important step in consolidating AIM’s position as the world’s leading junior stock market for companies with a value of between GBP15m and GBP200m, as competitor markets do not have stamp duty.
“AIM already attracts companies from all over the world, as well as supporting some of the UK’s best home-grown success stories. We believe that the value to the country of cementing this leading international position will be substantial, and as managers’ of VCTs focussed on AIM we’re excited about the potential it brings."
Richard Power, head of the smaller companies team at Octopus, says: “The Government’s intention, following consultation, to abolish stamp duty on AIM shares should prove a boost for UK smaller companies. AIM is a highly successful market, which continues to provide a strong platform for entrepreneurial businesses to raise capital. A number of exciting UK businesses have successfully floated on AIM in the last year alone, and we see today’s announcement as another positive step in raising the profile of the market and attracting other high growth companies to it. The measure will help promote liquidity and reduces the cost of equity funding for smaller companies, which can only be a good thing.
“This support of the sector is good news for our AIM VCTs which offer a tax efficient way of investing in this high growth market. Although VCTs do not pay stamp duty on qualifying AIM shares, and therefore will not benefit from any immediate cost savings as a result of the Government’s plans to abolish stamp duty on AIM shares, the Government’s commitment to supporting high growth companies on AIM is a positive step for the market and those companies looking to access it. Smaller companies are still undervalued when compared with large companies and we believe there is a significant value to be found on AIM for our investors by supporting fast-growing innovative companies with attractive earnings growth potential.”
