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Client money can stay ‘on platform’ for IHT planning portfolios

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Client money can stay ‘on platform’ for inheritance tax (IHT) planning portfolios, according to Fundamental Asset Management (FAM), an independent investment management firm specialising in the AIM market.

The purchase and sale of AIM quoted securities often used to be the preserve of specialist brokers, but Fundamental AIM IHT Portfolios can now be accessed through wrap platforms.
 
This means that, in allocating money to a specialist manager, advisers aren’t forced to direct money off platform, which can cause unnecessary monitoring and administrative burdens.
 
Chris Boxall, co-founder of FAM, says: “The improving quality of companies on the Alternative Investment Market (AIM), combined with the Individual Savings Account (ISA) rule changes from August 2013 which allowed AIM shares to be held within ISAs, has seen a growing number of investors consider AIM for both its investment and tax planning attractions. And the ability to invest in IHT qualifying portfolios through many leading wrap platforms now makes it even easier for clients and advisers. 
 
“AIM continues to be a market for small, relatively early stage businesses but is also attracting a growing number of more mature, highly profitable, family or founder controlled companies.”
 
There were only 1,000 companies on AIM at the end of September 2016 which is down from 1,044 at 31 December 2015. Despite the declining numbers of companies the overall market capitalisation of AIM continued to surge higher to GBP82.98 billion at the month end, compared with GBP80.57 billion at the end of August and only GBP73 billion at the end of 2015.
 
Boxall says: “AIM is no longer the high-risk market of former times, where speculative resource stocks and unknown international companies proliferated. It is now home to a large number of well-managed, profitable, dividend yielding UK based business.
 
“As the market has improved it has also become much easier for investors to buy and sell AIM shares and for advisers to offer access to these exciting companies to their clients, many of which come with attractive inheritance tax planning benefits.”
 
To end September 2016, the standard Fundamental AIM IHT Portfolio rose over 100 per cent over five years, which compares with 30 per cent rise from the FTSE100.  
 
Boxall says: “Advisers can keep everything in one place maintaining the same pricing structure. And investing via platforms can also expedite investment without the need to sign lots of paperwork, which is particularly important for AIM for inheritance tax planning purposes with the short, two year, qualifying period a key attraction.”

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