Millions of pounds worth of PEP and ISA savings could be wiped out by inheritance tax (IHT) bills as many people cling onto their tax efficient savings without realising that 40% tax would still potentially apply on death. It is estimated that around £0.5bn or one sixth of the annual IHT take of around £3bn comes from PEPs and ISAs.

However, with sensible IHT planning it is possible to legitimately mitigate the majority if not all of a person’s exposure to IHT. There are many ways to achieve such mitigation including an investment into a basket of shares listed on the Alternative Investment Market (AIM). AIM was launched in 1995 by the London Stock Exchange as a flexible trading market for growth companies. It now has over 1500 listed companies.

Under legislation introduced in 1996 any money held in qualifying AIM companies and held for more than 2 years at the time of death is exempt from IHT.

It is also possible to structure an AIM portfolio so that on death the value of your shares are worth no less than your original investment should the markets fall and this offers significant protection.

If you would like to find out for free what your potential Inheritance Tax exposure might be and how to mitigate it or to have an independent assessment of your current investments then please contact Matthew Berry, Chartered Financial Planner of Park Row on 07968 013 895, 01204 364484 or via email on matthew.berry@parkrow.co.uk