Stellar AIM ISA
This AIM ISA offer from Stellar Asset Management invests in AIM stocks which should qualify for Business Property Relief. After two years the investment should become IHT free. An optional insurance policy offers protection against falls in value.
- 40-stock portfolio
- Optional insurance policy option can help protect against market falls
- £20,000 minimum
The Stellar AIM IHT portfolio has been running since 2008. It invests in a portfolio of 40 AIM quoted companies, all of which should, in the opinion of the manager, qualify for Business Relief.
Stellar looks to hold 40 companies across eight sectors. The only sectors they exclude are utilities, oil and gas. The full sector breakdown can be seen below, as based on valuations as at 5 October 2018.
Annual performance (%)
|Stellar AIM IHT Portfolio||38%||-2%||30%||10%||12%||-17%|
|FTSE AIM All-Share||20%||-19%||4%||17%||24%||-18%|
Source: Stellar, per calendar year but running to 5 January each year, ending January 2019. Shows total return, inclusive of dividends, net of management fees and commission. Past performance is not a guide to the future. Note this is the model portfolio performance: every client's portfolio will be slightly different
Stellar offer an optional life insurance policy through AIG, known as ESP Plus, at an additional cost of 0.5% to 2%, depending on the level of cover taken. The policy covers any loss should the initial investment have fallen in value at the time of death.
There are a few conditions - you need to be under 80 years old when you invest and you will need to confirm a few health details. The maximum insurance per individual is £100,000 (equivalent to an investment of £250,000).
Risks – important
This, like all investments available through Wealth Club, is only for experienced investors happy to make their own investment decisions without advice.
AIM IHT portfolios are high-risk so should only form part of a balanced portfolio and you should not invest money you cannot afford to lose. Before you invest, please carefully read the Risks and Commitments and the offer documents to ensure you fully understand the risks.
AIM stocks can be hard to sell, particularly at the smaller end of the market, and can be illiquid. AIM shares can be very volatile especially if the market falls sharply. The difference between the buying and selling price of AIM-listed shares is often wider than the spread for shares listed on the main market.
Tax rules can change and benefits depend on circumstances. Eligibility for BPR is assessed at the date of death and will depend on the companies in the portfolio remaining qualifying. Broadly speaking, you will need to have held a BPR qualifying stock for at least two years and still hold it on death to qualify.
The Chancellor has asked the Office for Tax Simplification to review a range of aspects of IHT, including BPR. A report has been published in July 2019. It is as yet unknown when and if any of the recommendations will lead to a change in rules. Currently, investments qualifying for Business Property Relief should be free from IHT after two years. Please remember, tax rules can and do change and benefits depend on circumstances.
Fees and charges
A summary of the main charges and savings is shown below – The investment may have additional charges and expenses: Please see the provider documents for more details. If you would like a full breakdown or a personal illustration, please let us know.
|Full initial charge||0.5%|
|Wealth Club initial saving||—|
|Net initial charge through Wealth Club||0.5%|
|Annual management charge||0.75%|
|Additional insurance charge||0.5-2%|
See example of the total charges over 5 years
Wealth Club aims to make it easier for experienced investors to find information on – and apply for – tax-efficient investments. You should base your investment decision on the provider's documents and ensure you have read and fully understand them before investing. This review is a marketing communication. It is not advice or a personal or research recommendation to buy the investment mentioned. It does not satisfy legal requirements promoting investment research independence and is thus not subject to prohibitions on dealing ahead of its dissemination.
- Portfolio size
- £70.0 million
- Average market cap
- £851.0 million
- Initial charge
- Saving via Wealth Club
- Net initial charge