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Growth potential, ISA benefits and inheritance tax exemption in one investment

Some people are not aware that ISAs are subject to inheritance tax like most other investments. But the Octopus AIM Inheritance Tax ISA can provide inheritance tax exemption as well as tax-free income and growth.

With the Octopus AIM Inheritance Tax ISA, we invest your money in a portfolio of carefully chosen companies listed on the Alternative Investment Market (AIM). We choose established companies that are typically profitable and paying regular dividends. You retain access to your investment, which continues to enjoy all the benefits of the ISA wrapper. However, the most important factor is that we invest in the shares of companies that are expected to qualify for Business Property Relief. As long as shares have been held for at least two years and are still held when the investor dies, they can be left to their beneficiaries free from inheritance tax.

You should keep in mind that tax rules may change in the future, and the value of tax reliefs depends on your own personal circumstances. You should also know that tax reliefs depend on portfolio companies maintaining their qualifying status. Please remember, we cannot offer any guarantees about the growth you will achieve. Also, the value of an investment may go down as well as up and you may not get back what you originally put in.

For full details of the benefits, fees, charges and risks, read the product brochure below. Before making an investment decision, we recommend you talk to a financial adviser and read the ‘What are the risks?’ section below.

Reasons to consider investing in the Octopus AIM Inheritance Tax ISA

Potential for growth and dividends
The Octopus AIM Inheritance Tax ISA invests in a portfolio of carefully-chosen companies listed on AIM, the world’s most successful market for fast-growing smaller companies. AIM is home to a wide variety of companies that offer the potential for growth and dividends. The market has had some tremendous success stories over the years.

A simple process
This is an investment in shares that we select for you. This means there are no complicated legal structures (as with a trust) and no medical underwriting (as with an insurance policy). You retain access to the investment, which continues to enjoy all the benefits of the ISA wrapper.

More of your wealth can be passed on to your family
The Octopus AIM Inheritance Tax ISA invests in companies that are expected to qualify for relief from inheritance tax. It can be an effective way to reduce or potentially even eliminate an inheritance tax bill that a family may otherwise have to pay on the deceased’s estate.

Speed
Traditional estate planning solutions can take seven years before they become exempt from inheritance tax. However, an investment in this service can become 100% inheritance tax exempt after just two years.

Access
You can ask us to sell shares at any time. We can usually sell shares within a week, however, in some instances it could take significantly longer.

What are the risks?

You may lose money
The growth in value of your investment depends on the performance of the companies in your portfolio. We do not offer any guarantees about the growth you will achieve, and it’s important to understand that the value of your investments can go down as well as up, so you may not get back the full amount invested.

On a day-to-day basis, the value of AIM-listed companies can fall or rise more sharply than shares in larger companies listed on the main market of the London Stock Exchange.

This means that the Octopus AIM ISA is likely to be a higher risk investment than other stocks and shares ISA investments. This is a particularly important factor to consider if you are thinking about transferring your existing ISA investments to this ISA.

The investment may be difficult to sell
The shares of AIM companies tend to be harder to sell than the shares of large companies, such as BP or Vodafone. This means that if you decide to make a withdrawal or transfer from your ISA, we may not be able to sell the shares immediately. You may have to accept a price that is less than the real value of the companies.

Tax rules can change
Rates of tax, tax benefits and tax allowances are based on current legislation, interpretation based on case law and HMRC practice. We can’t guarantee that the tax rules won’t change in the future. Also, the value of tax reliefs depend on your own personal circumstances.

BPR is assessed on a case-by-case basis
We cannot guarantee that the investments we make will qualify for BPR in every case in the future. HMRC will only conduct a BPR assessment after the death of an investor, to confirm whether the companies invested in qualify for BPR at that time. If you borrow money to invest in the Octopus AIM Inheritance Tax ISA, the investment is unlikely to qualify for relief from inheritance tax.

Related Documents

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Octopus AIM Inheritance Tax ISA brochure

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Octopus AIM Inheritance Tax ISA application form

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Octopus inheritance tax products terms and conditions

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Octopus AIM Inheritance Tax ISA transfer form

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