Tag Archives: stewart
Using AIM For IHT Purposes
AIM shares can be used to mitigate the death tax under business property relief rules. . By Nyree Stewart | Published Sep 30, 2013 Investing in AIM shares hit the headlines earlier this year when they became permitted investments within Isas, but perhaps less well known is the fact they can also be used for inheritance tax-planning purposes. Under the umbrella of business property relief (BPR) holding shares in an unquoted company can qualify for 100 per cent tax relief, providing they are owned for at least two years. For these purposes, companies listed on AIM are considered unquoted, even though they are technically listed on a stock exchange. However, as with most UK tax regulations, it is not that straightforward. Jonathan Gain, chief executive of Stellar Asset Management, explains: “Not all companies on AIM will qualify. There are a number of foreign-owned resources and mining companies which are managed and controlled in far flung places that are not necessarily EU managed or domiciled, so those types of companies won’t qualify.” That said, he points out this still leaves the investor looking to mitigate their IHT liability with more than 1,000 companies to choose from that have a UK presence or UK activity, which means they qualify for BPR. Marilyn McKeever, associate director in the private client practice at Berwin Leighton Paisner, adds: “Shares in unquoted trading companies are, broadly, exempt from inheritance tax. An individual can give such shares to a trust without the 20 per cent entry charge and for as long as the trustees hold the shares, the trust will escape the periodic and ‘exit’ charges.” But Paul Thompson, tax and estate planning consultant at Canada Life, adds that they can be quite volatile and so won’t suit every investor’s risk profile. Mr Gain agrees that the size of most of the companies on AIM are clearly not as substantial as say the FTSE 100-listed firms, but there are still some surprisingly large and well-known names such as Asos, Majestic Wine and Mulberry. “These are decent sized companies and are therefore set up to be managed well in good times and bad times and are much less volatile than much smaller companies.” On the issue of whether AIM investments are more volatile, he points out that people looking to use AIM for IHT mitigation understand that it will be a more volatile investment. But that can be managed by having the portfolio discretionally managed and can therefore mitigate the volatility by having a broad spread of holdings.” Other key points for using AIM shares as an IHT tool is to know which are the good companies and meet the management on a regular basis to understand what their plans are and to make a more informed buy or sell decision. Investing in AIM shares for IHT purposes is an alternative way to both mitigate IHT and provide some extra returns. But with all investments, the key is due diligence and understanding the risks involved in investing in a much smaller market. Nyree Stewart is deputy features editor at Investment Adviser Continue reading
Bioenergy A Burning Question For Tasmania’s Forests
24 July 2013 Bioenergy a burning question for Tasmania’s forests AUTHORS Stewart Williams Russell Warman DISCLOSURE STATEMENT Stewart Williams teaches and researches at the University of Tasmania. He receives funding from AHURI and NCCARF. Russell Warman has previously worked as a policy analyst with ENGOs involved in Tasmania’s forest negotiations. Provides funding as a Member of The Conversation. utas.edu.au Harnessing the energy in wood may help wean Australia off fossil fuels. Flickr/chriscardinal With Australia trying to meet renewable energy targets and reduce emissions wherever possible, we should be considering bioenergy. Bioenergy can be made by burning biomass in a variety of forms, including agricultural by-products such as rice husks, poppy seeds, sugarcane waste and manure. It can also be made from forestry by-products such as sawmill and wood wastes. Tasmania is a prime candidate for such developments. Visiting international researcher Professor Andreas Rothe of the University of Applied Sciences, Weihenstephan , has recently released findings of a six-month study he conducted for Forestry Tasmania. He suggests that energy produced from wood “could lift Tasmania’s bioenergy contribution beyond 30%”. There seem to good reasons for Australia to transition towards greater use of bioenergy. It is a renewable and relatively secure energy source that can reduce CO 2 emissions by replacing fossil fuels. It seems a relatively straightforward proposal, especially given Prof Rothe’s experience in Europe. People of forested parts of Europe – such as Prof Rothe’s home state of Bavaria in Germany, and Scandinavia – have longstanding cultural practises and economies based on forest resources, with considerable uptake of bioenergy produced from wood. But people in Australia have a different relationship with forests. Unlike much of Europe, Australia has forests with little or no history of industrial resource extraction. Australian people have different values and perceptions about how those resources should be used. These differences are reflected in bitter conflicts over native forests in most of the states, not least in Tasmania. Recent efforts to forge peace in the Tasmanian forests signal progress. Professor Rothe takes some of these issues into consideration, and excludes the use of old-growth forest from his research. Tasmania’s bioenergy aspirations aren’t new. In 2002 Forestry Tasmania planned for a 30 megawatt bioenergy plant at a site south of Hobart, meant to burn wood residue and provide electricity to run the site and a surplus to the grid. It now includes a modern regrowth sawmill, log yard and rotary peel veneer mill. But the power plant has never been built. The proposal was submitted to the State’s planning authority but it failed to attract investment. This financial hesitation reflects uncertainties around the benefits of bioenergy. Can bioenergy substitute fossil fuels? Should we put new pressure on resources such as forests, clean air and water, which are already critically scarce (and key to other services including biodiversity conservation and food production)? Early on environmentalists and some industry sectors supported bioenergy in North America and Europe – backed by significant subsidies. But recently this support has started to unravel as mainstream economists question the logic of the subsidies, investors move away , courts intervene , and environmental organisations question the cost of the growth in biomass demand. Even before these doubts were raised in the Northern Hemisphere, there was a wariness in Australia about claims to make use of “waste” or “residue” wood in biomass. The experience of the rise of the wood-chip industry, initially slated as an industry sideline for waste logs, into a driver of native forest logging, is still fresh in the memories of many Australians. Tasmania is a prime candidate for any developments in bioenergy. Local and rural communities across the state are undergoing major changes. Bioenergy could be part of innovations as the forestry industry is restructured. But a lot more work will be required if the use of bioenergy from wood is to have any chance of going ahead with widespread community support, especially if native forests are involved. This issue, towards which the Tasmanian Forest Agreement is perhaps making some fragile first steps, concerns the need to forge a broader social consensus on how native forests are used and valued. It might be some time before Australia is ready for bioenergy. By then, ironically enough, Europe and North America might be winding back from their initial enthusiasm. Continue reading
