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Stock and shares ISA qualifying investments extended

The tax free growth and income from holding shares in ISA accounts has been a compelling reason to use them as wrappers for many years.  However, a potential drawback that has endured with ISAs is their relatively inflexible investment options.  Additionally, they remain in an investor’s estate for Inheritance Tax.

However, there have been some notable changes introduced from earlier this month,   which have extended the list of qualifying investments to include company shares admitted to trading on any recognised stock exchange in the European Economic Area (EEA). 

This allows for shares traded on the Alternative Investment Market (the AIM) to be held as an ISA asset.   This additional flexibility allows investors greater choice, but furthermore opens the possibility of investing in shares that, once held for 2 years, would qualify for 100% Business Property Relief (i.e. be exempt from Inheritance Tax).

AIM shares are usually held in anticipation of prospective higher investment returns.  Sheltering them within an ISA account is certainly a potentially attractive option.



Date: 29th August, 2013
Author: Tony Slocombe


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