Head shot of Rachel Efetha talking about Alternative Investment MarketBy Rachel Efetha, Chartered Financial Planner.

The Alternative Investment Market (AIM) is a part of the London Stock Exchange that helps smaller or growing companies raise money by selling shares to investors. It’s designed to be more flexible and less strict than the main stock market, so businesses that might not yet be big enough or established enough for the main exchange can still attract investment.

AIM offers investors a chance to invest in companies with lots of potential, but it can also be riskier because these companies might be less stable or more unpredictable. Many well-known companies started on AIM before growing and moving to the main market.  Some examples are:

  • Domino’s Pizza UK: Domino’s started on the AIM in 1999 and grew significantly as it expanded its franchise model. By 2008, it had become large enough to move to the main market of the London Stock Exchange.
  • ASOS: The popular online fashion retailer joined the AIM in 2001 when it was still a small company. After experiencing rapid growth, ASOS transitioned to the LSE’s main market in 2018, becoming a major player in online retail.

What are the tax benefits?

Investing in AIM shares can offer several tax benefits for UK investors. Here’s a simple breakdown of the key ones:PFS logo

  1. Inheritance Tax Relief (IHT Relief): AIM shares are often eligible for Business Relief. If you hold AIM shares for at least two years and still own them at the time of death, they may be exempt from inheritance tax. This is a big benefit for those thinking about passing on wealth, as it can potentially save 40% of the value of the shares from inheritance tax.
  2. Capital Gains Tax (CGT) Relief: When you sell shares, any profit you make is subject to capital gains tax. However, you can offset gains made on AIM shares with losses from other investments, potentially lowering your tax bill. In addition, AIM shares can qualify for the Annual Exempt Amount, which allows you to make a certain amount of profit each year before paying CGT.
  3. No Stamp Duty: When you buy shares on the main market, you usually have to pay stamp duty reserve tax (SDRT) at 0.5%. However, AIM shares are exempt from stamp duty, so you avoid this cost when purchasing AIM shares.

These benefits can make AIM investments more attractive for people who are willing to take on higher risk with the potential for higher returns, while also enjoying significant tax savings.

How Anstee & Co can help you with the Alternative Investment Market.

We are a firm of Independent Financial Advisers (IFA’s). This means that the financial advice we provide to you is unbiased. Why not arrange a meeting to see how we can help you? The initial meeting is at our cost and is without obligation. Meetings can be arranged at a time and location that is convenient for you.

call back logo for help with Alternative Investment MarketsOur Head Office is located at:

  • Kettering, Northamptonshire

Additionally, our financial advisers live and make use of meeting rooms in:

  • Bedford, Bedfordshire
  • Market Harborough, Leicestershire
  • Northampton, Wellingborough and Thrapston in Northamptonshire.

Our expertise covers all aspects of financial planning including pensions, investments, and mortgages.

If you have any thoughts or comments on this article, “Is the Alternative Investment Market, for you?”, then it would be great to hear your views.

Financial Conduct AuthorityFinally, the information contained in this article is for information purposes only and does not constitute financial advice. No action should be taken based on this information alone. Anstee & Co is authorised and regulated by the Financial Conduct Authority (FCA).”