AIM portfolio service

4 Shires offers clients access to an equity investment portfolio which can benefit from inheritance tax mitigation when passing their wealth to future generations.

What is AIM?

  • AIM was established in 1995 by the London Stock Exchange (LSE) with the mission to help young and dynamic businesses to raise capital for growth and future development. It is considered one of the most successful growth markets globally
  • There are currently c.950 companies listed on AIM with a total market value of over £100 billion, home to many household names such as, Asos, and Fevertree Drinks.
  • Many AIM listed companies have also been promoted to the FTSE All Share index. These include: Domino’s Pizza; Lloyds of London insurers Hiscox and Lancashire Holdings; and Melrose Industries, who recently sealed an unconditional offer for the FTSE 100-listed engineer GKN, a company with a market capitalisation of £7.9bn.

The Benefit of Investing in AIM

  • Estate planning – AIM portfolio investment offers the benefit of potentially reducing and mitigating inheritance tax liability.
  • Flexibility – AIM investment can be withdrawn anytime if circumstances change, giving benefactors greater control over their assets.
  • Lower required holding period – by investing in companies listed on AIM that qualify for business property relief (BPR) for two years, investors can expect to obtain up to 100% relief from inheritance tax on their AIM investments. This compares to the seven year survival period by potentially exempt transfer (PET).

Our Investment Philosophy

One of the main purposes of AIM is to give small companies a listing and access to capital to help fund their growth and development. Smaller companies have greater prospects for growth, however they also have less research coverage and fewer institutional investors.

This provides an opportunity to use our expertise to select stocks with the potential to provide significant growth over the long term. By holding a diversified portfolio of shares of between 20 and 40 companies, we aim to protect you against the greater risks of capital loss associated with individual holdings.

We follow these processes looking for suitable stocks:

  • Qualification screening: we have an in-house screening process to select companies that we anticipate ought to qualify for BPR.
  • We focus on companies with track records of scale, profitability and technological competitiveness.
  • We avoid unprofitable businesses and those tradeat excessive valuations. Some of our favourites include Dart Group, which owns the UK’s third largest airline and second largest tour operator Jet2 holidays, and Johnson Service Group, which provides textile rental and laundry services including workwear and hotel/restaurant linen.

Risk Disclaimer: The value of investments and the income you get from them may fall as well as rise, and there is no certainty that you will get back the amount of your original investment. You should also be aware that past performance may not be a reliable guide to future performance. This document is not intended as investment advice. Any security mentioned in this commentary is for information purposes only and is not a recommendation to buy.