Saving changes come into force opening door to duty benefits

 
Michael Bow
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A GOVERNMENT overhaul of independent saving accounts (Isa) allowing junior stock market listed firms into savers’ portfolios comes into force today, paving the way for an inheritance tax free Isa.

The move, floated in the 2013 Budget in a bid by chancellor George Osborne to encourage investment into small and medium-sized firms, will mean investors can plough just over £11,500 into alternative investment market (Aim) shares.

Aim listed stocks were once considered too risky to include in personal saving accounts due to the volatile nature of stock prices and their thin trading volumes.

But the inclusion of increasingly complicated products into saving portfolios – such as exchange-traded funds – has increased the case for Aim stocks being allowed into Isas.

The move will mean savers can plough cash into Aim shares, which benefit from business property relief and exempt savings from inheritance tax once held for at least two years, meaning no lifetime taxes and death taxes.

Despite this however, experts have said the appeal will be limited given the volatility of Aim-listed stock and the risk of investors losing cash.