We hold our investments in self invested personal pensions (Sipps) and individual savings accounts (Isas), and have been investing in Aim shares to mitigate inheritance tax (IHT) for more than five years. Any income generated within our Isas, which we don’t wish to withdraw, is re-invested in Aim shares. This means that while many of our purchases have reached the qualifying two years [holding period for IHT exemption], some have not.
We hold EMIS (EMIS) and used to hold K3 Capital and Crestchic, so wondered what the IHT status is when a company has been taken over? For example, if we had 200 shares five years ago, bought another 100 in December 2021 and a final 50 in April 2022, how do we reset the timeline for qualifying re-investment?
I would assume (hope) the shares we bought five years ago can be re-invested in another company and retain their qualifying status. While the 100 shares bought in December 2021 and April 2022 can be re-invested in another company until they do qualify. Or, does the clock re-set to the start of the two-year timeframe?
PD
Rob Morgan, chief investment analyst at Charles Stanley, says:
It’s been possible to invest in Aim shares within an Isa since 2013 and doing this has a number of tax advantages. Isas invested in individual Aim shares are free of income, capital gains and, as long as certain rules are met, IHT.