AIM tax breaks at risk from large companies

There are fears that tax breaks for AIM investors could be scrapped by the
Treasury, due to the number of large companies listing on the market.

A £100m cap on the size of company that can take advantage of capital gains
and inheritance tax concessions could be introduced by the Treasury, as AIM
prepares for its largest flotation to date – fund manager New Star Asset
Management, worth £600m.

The London Stock Exchange has called for New Star to join the main market as
quickly as possible, due to fears that listing on AIM could provoke the Treasury
into a clampdown, according to The Independent.

Set up for small business and startups, AIM now houses more than 60 companies
with a market value of over £100m.

Baker Tilly head of capital markets Chilton Taylor told the newspaper that
the LSE was concerned to keep AIM’s special tax status.

‘Taking the tax breaks away would destroy it for the younger companies, their
directors and proprietors, and the entrepreneurs for which AIM was designed,’
said Taylor. ‘We must make sure they are not abused, with companies coming to
AIM solely for tax purposes.’

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