BR Guide Second Edition

AIM ISA CONTRIBUTIONS OVER A NUMBER OF YEARS TO BUILD A TAX EFFICIENT POT SCENARIO: Mark, retired and in his 70s, has accumulated a £135,000 ISA portfolio including stocks and shares, which he has over 20 years of experience of investing in. He would now like to find a way to invest that retains the tax benefits of an ISA wrapper, without the potential IHT liabilities. THE MANAGER OF THE SERVICE INVESTS THE FUNDS INTO SUITABLE AIM BR SHARES AIM BR There are none of the costs of putting assets into trust or buying a life assurance policy. Any non-AIM/non-BR qualifying AIM shares are sold and, because this is done within the ISA wrapper, any gains made on the shares are not subject to CGT. AIM IHT ISA MARK TRANSFERS HIS EXISTING ISA TO AN AIM IHT ISA WITH THE OBJECTIVE OF IHT MITIGATION, FREE OF TAX CASE STUDY 7 53 CASE STUDIES Estate without IHT planning AIM IHT ISA AIM IHT ISA (3.5% growth (net) not reinvested**) AIM IHT ISA (3.5% growth (net) reinvested**) AIM IHT ISA (3.5% growth (net) reinvested with additional £6,000 invested at start of each year**) GROSS (INVESTMENT) VALUE £135,000 £135,000 £135,000 £135,000 £135,000 1% INITIAL FEE £0 £1,350 £1,350 £1,350 £1,350 NET INVESTMENT N/A £133,650 £133,650 £133,650 £133,650 IHT AT 40% £54,000 £0 £0 £0 £0 GROWTH IN VALUE ON GROSS INVESTMENT - £54,000 - £1,350 £23,389 £25,084 £58,385 (£30,000 of which is additional capital) VALUE OF INHERITANCE LEFT TO BENEFICIARIES £81,000 £133,650* £157,039 £158,734 £192,035 IN THIS EXAMPLE, THE CHOSEN AIM IHT ISA MANAGER CHARGES 1% INITIAL FEE WITHOUT ANY DEALING FEES, ONGOING FEES OR EXIT CHARGES. THESE FIGURES WILL VARY DEPENDING ON WHAT FEES ARE APPLIED BY THE RELEVANT AIM IHT MANAGER This leads to 100% IHT relief and also offers access to the growth potential of carefully-selected UK smaller companies, and access to his funds when he wants them. BR Qualifying Results after five years *Even if the value of the AIM IHT ISA doesn’t go up, his beneficiaries still save £53,460 after all fees without the IHT liability. **Each additional investment starts a new two year BR qualification clock for that investment.