Octopus Aim IHT portfolio

valueman1

As an alternative, investing in high yield blue chip stocks such as Rio Tinto with a 9.8% yield, the surplus income can be taken exempt of IHT, even the day before death, that’s quite a good option.

bostonerimus

I have no knowledge of the firm and so my thoughts are riddled with my prejudices. The idea of an AIM IHT avoidance portfolio and service strikes me as a way to target people with a lot of money and maybe greedy enough to make some poor decisions. I then read the first few paragraphs on the website and it pretty much confirmed by initial impressions. I would talk to an estate lawyer and local IFA before a cephalopod.

Additionally it seems strange to use risky investments to pass on an inheritance. I’d want something solid and conservative to set up my heirs to make their own decisions

valueman1

@bostonerimus are you suggesting Octopus are a predatory mollusc. Probably no more predatory than an estate lawyer or an IFA!

bostonerimus

valueman1 said:

@bostonerimus are you suggesting Octopus are a predatory mollusc. Probably no more predatory than an estate lawyer or an IFA!

Well I won’t disagree with you, but estate planning is very personal and I think it’s best done face to face. I would not want to use risky investments to secure an inheritance either, whatever their hopes for tax benefits.

Aegis

bostonerimus said:

I have no knowledge of the firm and so my thoughts are riddled with my prejudices. The idea of an AIM IHT avoidance portfolio and service strikes me as a way to target people with a lot of money and maybe greedy enough to make some poor decisions. I then read the first few paragraphs on the website and it pretty much confirmed by initial impressions. I would talk to an estate lawyer and local IFA before a cephalopod.

Additionally it seems strange to use risky investments to pass on an inheritance. I’d want something solid and conservative to set up my heirs to make their own decisions

It's something of a niche, and really should only be used where both the donor and the recipient are happy with taking a risk, and in many cases should be considered alongside a life insurance policy to cover the tax that would be due in the first 2 years if early death occurs - that then builds in a guaranteed 40% downside protection in the form of the IHT relief.

Definitely not for everyone!

Thrugelmir

bostonerimus said:

I have no knowledge of the firm and so my thoughts are riddled with my prejudices. The idea of an AIM IHT avoidance portfolio and service strikes me as a way to target people with a lot of money and maybe greedy enough to make some poor decisions. I then read the first few paragraphs on the website and it pretty much confirmed by initial impressions. I would talk to an estate lawyer and local IFA before a cephalopod.

Additionally it seems strange to use risky investments to pass on an inheritance. I’d want something solid and conservative to set up my heirs to make their own decisions

AIM has matured since it's formative years. There's plenty of good quality companies listed on the index. At least profitable unlike many of the SPACS that get listed onto the Nasdaq. A far less well regulated market it must be said. The UK in some regards maintains good standards when it comes to Corporate Governance and not allowing investors to be screwed over. 

bostonerimus

Aegis said:

bostonerimus said:

I have no knowledge of the firm and so my thoughts are riddled with my prejudices. The idea of an AIM IHT avoidance portfolio and service strikes me as a way to target people with a lot of money and maybe greedy enough to make some poor decisions. I then read the first few paragraphs on the website and it pretty much confirmed by initial impressions. I would talk to an estate lawyer and local IFA before a cephalopod.

Additionally it seems strange to use risky investments to pass on an inheritance. I’d want something solid and conservative to set up my heirs to make their own decisions

It's something of a niche, and really should only be used where both the donor and the recipient are happy with taking a risk, and in many cases should be considered alongside a life insurance policy to cover the tax that would be due in the first 2 years if early death occurs - that then builds in a guaranteed 40% downside protection in the form of the IHT relief.

Definitely not for everyone!

I've been doing some IHT planning recently and while the US has very different rules it's one area where I was definitely glad of some expert advice. Maybe AIM investments are right for the OP, but I would advise that they be used as just a part of an overall estate plan and that they talk to an IFA or lawyer with estate planning expertise to develop that. Personally I would not want to use such a potentially volatile portfolio as part of my estate planning, but that's just me.

Malthusian

bostonerimus said:

Additionally it seems strange to use risky investments to pass on an inheritance. I’d want something solid and conservative to set up my heirs to make their own decisions

If you're doing estate planning and have an estate liable for IHT, then solid and conservative investments carry a risk of losing 40% overnight.

But even a diversified portfolio can easily lose more than 40% so, as ever, there is no risk-free option. A cautious investor could see their AIM portfolio go down by 50% (or more), panic, sell the lot, and as the cash is now IHT-liable again they end up making a 70% loss for their heirs (compared to giving them the money and surviving the 7-year period).

valueman1

With a 3-4 year horizon an aim portfolio seems a reasonable option for 25% of investable funds over the threshold. Yes, it is volatile but less volatile than buying individual aim shares. 

masonic

valueman1 said:

With a 3-4 year horizon an aim portfolio seems a reasonable option for 25% of investable funds over the threshold. Yes, it is volatile but less volatile than buying individual aim shares. 

If your objective is to lose less than 40%, then you stand a pretty good chance of success over that timescale.