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MoneyWeek - The future of BPR for Aim Shares held in an ISA

ended 06. February 2023

A journalist on MoneyWeek has asked if we have someone who would be interested in providing commentary on the future of BPR for Aim Shares held in an ISA.

More specifically:

1. Do you think that there is any chance of the government axing, reducing or restricting BPR for Aim shares held in an ISA before the next election?

2. What about a possible Labour government under Keir Starmer and Rachel Reeves?

3. If the government did axe reduce or restrict BPR for Aim shares held in an ISA, could this lead to a "double whammy" where investors lost both the tax relief but also saw the value of their shares fall?

4. Bearing this in mind, is it still a good idea to put Aim shares in your ISA?

Rather than having multiple comments, the journalist is just looking for one commentator to answer the questions above. So, could you respond in the thread if you're interested and you can meet the deadline which is the close of business tomorrow.

3 responses from the Newspage community

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Samuel Mather-HolgateVerified
Independent Financial Adviser at Mather and Murray Financial
The government have been unusually generous in allowing this relief to remain whilst also incentivising investors to back start-up and small companies through EIS and VCTs. It wouldn't surprise me if there was a change in policy from the Tories. They have liked hiking taxes over the last decade. If this changes, investors will have to be dynamic. If IHT is their main concern they could switch their investment to an EIS although that would carry even more risk and they would loose their 'ISA' wrapper.

We can, of course, only plan within the constraints of the current rules and an AIM ISA is great planning for those who have built up a large ISA portfolio over many years and are now trapped by its current IHT status.
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Philip DragoumisVerified
Director and Owner at Thera Wealth Management
I think the spirit behind Business Property Relief as envisaged by the government is for business owners to be able to hand down the business they have created to their children without incurring inheritance tax. The current offerings in the market whether they are ISAS with Aim shares or even some of the other non-listed products just seem to me like ways of taking advantage of this law to make IHT efficient investments.

It wouldn't surprise me therefore if these are axed at some point, along with perhaps the inheritance tax-free status of pensions.
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Steven Rowe0
Director at Lucent Financial Planning
I am happy to respond to this and am available tomorrow if needed.

I think they will be retained, as it encourages targeted investment and as 'death' is certain but timing of it is uncertain, it means that there is no definitive time when HMRC will 'lose' the money they would have had in IHT. Although, there are obviously averages.