30 October 2024
If you are covering the reform to inheritance tax rules for companies listed on AIM, please find below a comment from Amisha Chohan, head of small cap strategy at Quilter Cheviot:
“While it is disappointing that AIM shares will no longer be fully exempt from inheritance tax, we are pleased the government has seen sense to retain some sort of incentive to help drive the growth of this country’s smaller companies. With an effective tax rate of 20%, instead of IHT’s headline rate of 40%, AIM businesses, along with their growth potential, continue to give investors a compelling offer.
“The certainty now in place is being well received too, with the wider AIM index rallying strongly on the back of the news. AIM shares have been depressed for some time, partly due to the inflation and monetary policy backdrop, as well as the build up to this budget. But with this hurdle now mostly cleared, and interest rates beginning to fall, there is a clear runway for growth for these smaller companies.
“Given performance of recent years and where valuations sit, AIM companies have great potential. What the government now needs to turn its attention to is helping make this index thrive by getting more businesses to list and start their journey as a PLC on AIM. Increasing the diversity of business on the index will help not only provide investors with varied return drivers, but also give existing companies on AIM some certainty.”
