AIM boss: Inheritance tax sums don’t add up
As AIM celebrates its 30th anniversary the market’s boss is eying a crucial birthday present from the Treasury: tax clarity.
AIM shareholders were thrust into the tax spotlight last month after a leaked memo revealed Angela Rayner proposed Chancellor Rachel Reeves slap a series of taxes savers.
Scrapping the inheritance tax exemption for AIM shares was listed as a key pillar, which the Deputy Prime Minister said could raise between £100m and £1bn per year.
“I just don’t think the sums add up,” Marcus Stuttard, head of AIM, told CityAM.
“Business relief has a huge positive impact on the market and that significantly, by a major factor, outweighs the cost of business relief.”
Business relief on AIM shares was already slashed in half in the Autumn Budget but Prime Minister Sir Keir Starmer’s second-in-command proposed putting the remaining 50 per cent on the chopping block.
Reeves may have to plug £20bn gap
Chancellor Rachel Reeves is poised to hike taxes by as much as £20bn in the next budget, after analysis from KPMG revealed the government’s Spending Review could open a new blackhole if growth figures continue to wane.
Reeves’s £190bn spending splurge spiked tax fears as the Chancellor doubled down on her “iron clad” fiscal rules to fund day-to-day government spending by tax receipts.
The total abolition of business relief on AIM shares would come as the market is desperate to drive investor sentiment amid a backdrop of waning figures.
London’s junior stock market is projected to shrink by a fifth as a result of a flurry of delistings. The number of companies listed on AIM dropped to its lowest level since 2001 after 71 companies departed the exchange in 12 months, according to data from UHY Hacker Young.
Stuttard said the potential cost of business relief for the Treasury is “a drop in the ocean compared to the valuable contribution [AIM companies] make.
“One would hope that those statistics, and that stark contrast is visible to the government.”
He pointed to research from Grant Thornton commissioned by the LSEG last year that revealed UK incorporated companies on AIM make a £35.7bn contribution to UK GDB and help drive 410,000 jobs across supply chains.