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Charlotte Square – AIM Portfolio Service
Our AIM Portfolio service can be used to rapidly mitigate a potential inheritance tax (IHT) liability, by
utilising business property relief (BPR).
We do so by means of investing exclusively in companies listed on the Alternative Investment Market
(AIM), which achieve exemption from inheritance tax under BPR when held for just two years and at
time of death. AIM is firmly established as one of the world’s leading growth stock markets and is
currently home to over 1,000 young and growing smaller companies across a diverse range of
sectors based in the UK and overseas. AIM provides these companies with the opportunity to raise
equity capital whilst providing investors with potentially high returns. The UK Government continues
to provide substantial tax breaks for this junior market to support developing businesses which may
become the large companies of the future.
We are well resourced to research, analyse and manoeuvre in what is an under-researched capital
market full of opportunities. Recently there has been a change of legislation permitting AIM stocks to
be held in ISAs and since the 28th April 2014 the Government has abolished stamp duty on shares
quoted on AIM. All of this should encourage increasing flows of new monies into AIM which makes
this an ideal time to be involved in our AIM Portfolio Service.
Benefits
Tax efficiency
BPR is a powerful tool that many will use to quickly divert assets outwith their inheritable estate.
Accessible
Many do not wish to give up all of their capital in more conventional IHT planning, so the AIM Portfolio
service allows the capital to remain accessible if needs be, often supplementing more traditional
means of estate planning.
Income
An income can be produced from the underlying portfolio, subject to the usual caveats of equity
market investment.
ISAs
From 5th August 2013 HMRC has permitted inclusion of AIM stocks within ISAs. This offers a
compelling opportunity for inheritance tax relief AND capital gains tax relief AND income tax relief in
one wrapper!
40 Charlotte Square, Edinburgh EH2 4HQ
Tel: +44 (0) 131 624 7709
Fax: +44 (0) 131 624 7703
Charlotte Square is a trade name of Raymond James Investment Services Limited. (Raymond James) utilised under exclusive license. Raymond James is a
member of the London Stock Exchange and is authorised and regulated by the Financial Conduct Authority. Registered in England and Wales No. 3779657
Registered Office 77 Cornhill London EC3V 3QQ.
Email: [email protected]
Why Charlotte Square?
At Charlotte Square, we always regard suitability as the key ingredient in the construction of any
portfolio. In the case of AIM portfolios the hurdles are set by HMRC who are the sole arbiter in AIM
stock suitability, and as specialist AIM discretionary investment managers, we have the experience
and knowledge of those qualifying companies and conditions, with particular focus and constant
attention given to the quality of the stocks selected.
We prefer to conduct the research and analysis in-house using a variety of tools and resources at our
disposal. We apply the tests to meet HMRC eligibility based on our Focus List. Our investment
managers conduct detailed screening to identify certain characteristics, including:



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Balance sheet strength - To benefit from “survivor bias” inherent in AIM
Sales and dividend growth - Symptomatic of management confidence
Unique selling points – A sustainable competitive advantage that will bring opportunities and
growth
Momentum - The use of technical consultants to help optimise entry and exit points
Charlotte Square performance data as at 31/03/2015 – source Charlotte Square. FTSE data source Morningstar.
Charlotte Square
Discretionary AIM Clients
Average Monthly
1.08%
Return
Monthly Volatility
3.34%
FTSE AIM
Total Return
Average Monthly
Return
Monthly Volatility
FTSE 100 Total Return
0.17%
4.69%
Average Monthly
Return
Monthly Volatility
0.73%
3.47%
Total Return
3 Months
1 Year
2 Years
3 Years
4 Years
5 Years
Charlotte Square
Discretionary AIM Clients
1.24%
2.83%
36.36%
63.35%
77.16%
83.99%
FTSE AIM Total Return
1.52%
-14.78%
0.04%
-7.22%
-17.56%
6.47%
FTSE 100 Total Return
4.23%
6.34%
13.43%
30.94%
32.57%
42.43%
Source: Charlotte Square, data as at 31/03/2015, FTSE data source Morningstar.
These performance figures are calculated on a quarterly basis and are the total returns from all our discretionary AIM portfolios in
aggregate. The returns are net of all introducer and Charlotte Square fees and are adjusted for cash contributions and withdrawals each
quarter. Please note that the performance of individual portfolios may vary due to factors such as the portfolios size, stock selection and
timing of investment transactions.
Portfolio Strategy
This is a dynamic investment sector and our investment managers use an active investment style.
Growth companies often have a niche that persists; a clear ability to value such companies is critical;
and to change or sell if prospects weaken. Knowledge of the reinvestment rules is vital to avoid losing
the IHT exemption when seeking to maintain portfolio performance when buying and selling stocks.
We seek to diversify with stocks that exhibit low volatility while still producing growth and income.
When markets are weak we will place a higher emphasis on more defensive companies with high cash
reserves to afford a portfolio a greater degree of capital protection.
Above all, Charlotte Square will pay heed to the overall aims and objectives set by the clients and work
within these parameters. This is a bespoke service, tailored to THEIR needs.
For more information please contact;
William Forsyth
Investment Manager & Branch Principal
[email protected]
James Rae
Investment Manager
[email protected]
Important Information
Opinions constitute our judgement as of this date and are subject to change without warning. This investment product may
not be suitable for all investors. Potential investors are recommended to seek independent tax and financial advice before
making a decision. AIM investments carry a higher degree of risk than other securities and are, therefore, unsuitable for some
investors. The value of investments, and the income from them, can go down as well as up, and you may not recover the
amount of your initial investment. Tax benefits and allowances described in this factsheet are based on current legislation and
HM Revenue & Customs practice and depend on personal circumstances. These may change from time to time and are not
guaranteed. Where an investment involves exposure to a foreign currency, changes in rates of exchange may cause the value
of the investment, and the income from it, to go up or down. Past performance is not a reliable indicator of future results.
Neither Charlotte Square, Raymond James nor any connected company accepts responsibility for any direct or indirect or
consequential loss suffered by you or any other person as a result of your acting, or deciding not to act, in reliance upon any
information contained in this document. Before contemplating any transaction, you should consider whether you require
financial advice, which we would be pleased to provide upon request. Charlotte Square is a trade name of Raymond James
Investment Services Limited (Raymond James) utilised under exclusive licence. Raymond James is a member of the London
Stock Exchange and is authorised and regulated by the Financial Conduct Authority. Registered in England and Wales No.
3779657. Registered Office 77 Cornhill London EC3V 3QQ.
(CS8 Q1/15)