Monday October 29 has been set as the date for the Autumn Statement and one of the eagerly awaited parts of this for financial advisers could be an announcement to changes to Inheritance Tax (IHT), as a result of the review by the Office of Tax Simplification.

There have been many ‘second guesses’ as to outcomes from this review; from simplifying the nil rate band by merging the residence nil rate band with the nil rate band, perhaps extending the period on when a gift becomes effective or to making trusts less complex.

A further consideration could be changes to Business Relief and a lot has been speculated around the possibility of restricting this to only family owned companies transferring to other family members on death. I have also seen it suggested the ownership period to benefit from the tax break could rest on the beneficiary.

Whether there are changes to Business Relief or AIM stocks, here at Vertem it will always be somewhere we continue to research and to add value for clients. Larger investment houses tend to ignore the smaller stocks (which often include AIM) and they would find it difficult to make a ‘buy’ call anyway for clients, when their size means they could end up with a sizeable chunk of the company. It therefore falls to the smaller, boutique stockbrokers (like Vertem) to research these.

AIM is the most successful growth market in the world according to the London Stock Exchange. Launched in 1995, It enables small and growing companies to raise the capital they need to expand. Companies such as GVC, Dart Group (owners of Jet2) and ASOS have benefited from AIM, with market caps now running into billions of pounds. Their exceptional returns to investors far outweigh any IHT benefits.

When Vertem was set up we devised our own metrics to value stocks – we dive deeper than most, so we believe, and have been described by one ex FTSE100 CEO as doing research more akin to an investment bank than a traditional DFM. Our approach is always linked to intrinsic value and typically we calculate this via the combination of a discounted cash flow valuation, based upon internally built future cash flow models, blended with a unique and proprietary forward-looking earnings valuation.

As with all things Vertem, portfolios are built to suit the individual – we never shoehorn into something we made earlier and we apply the same to AIM clients. The cost to the investor is always transparent and we don’t ramp it up just because it says AIM on the tin – our standard maximum of 1% + VAT pa applies with a flat £250 entry cost.

Whatever comes out of the Autumn statement this time I’m pretty sure that one thing is certain – reducing a client’s IHT bill won’t get any easier to mitigate in future, not with the last published tax receipts being £5.2 billion and many a voter seeing this as a tax only on the rich.

The end of October also marks the first year of the Vertem Futurity Trophy, taking place at Doncaster racecourse on 26 & 27 October. This is the first year Vertem will be sponsoring the Group One event, which will be broadcast live on ITV.   Explaining why this significant sponsorship was so attractive, John Dance, Vertem CEO and racehorse owner, said that this sponsorship was all part of the strategy to increase awareness and recognition of the Vertem stockbroking name;

Vertem Stockbrokers is all about building something for the future. In our business we aim to provide growth and protection to clients’ assets, and in terms of this sponsorship, we are supporting the future stars of the sport. We believe this sponsorship, just like our investment aims, will deliver a high quality, long-term relationship with Doncaster and we look forward to a very exciting future working with them”.


This post was created for the DISCUS website by Vertem. Download their IHT portfolio brochure or find out more about Vertem’s investment services here ›