However, experts are warning investors to think carefully before ploughing their funds into volatile companies with low liquidity.
The new rules, brought in by the chancellor George Osbourne as part of the 2013 budget – mean savers resident in the UK can now invest just over £11,500 into Aim-listed shares. After two years this investment becomes exempt from inheritance tax, capital gains tax as well as enjoying stamp duty and business property reliefs.
However, experts are advising savers to make this a relatively small part of their investment portfolio – given the volatility of Aim-listed stocks.
Danny Cox, head of financial planning at Hargreaves Landsdown said that people have to ask themselves whether they would be interested in investing in Aim stock had the rules on tax not changed.
“Only invest in Aim if that’s something that you have been looking at. As a rule- of-thumb, we’d advise most investors not invest more than 5% of their money in Aim stock, because these are companies towards the top of the risk scale,” he said.
ISAs are only open to UK residents, although investors who keep their ISA wrappers on after leaving the UK can still enjoy tax relief on the savings that they have made and are able to start investing again once they become UK resident.
