Ostensibly, this means Alternative Investment Market (Aim) shares, most of which cannot be included in these tax efficient saving wrappers - only those with a dual listing are currently eligible for Isa inclusion, and most of these tend to be involved in the resources industry. Barclays stockbrokers provides a list of these here.
Certainly, there has been a great clamour from Aim investors to receive the same tax benefits as those investing in blue-chip indices.
Those supporting a change in the rules say that the exclusion is an unfair disadvantage for Aim investors for taking on extra risk, and stifles the flow of investment into the high growth companies that need it most. What’s more, it’s argued, some of Aim’s largest companies - such as Asos or Majestic Wine - are well established and no higher risk than many individual savings account (Isa)-eligible companies listed on the main market. Supporters say an end to the ban could help to drive further improvement in the quality of Aim's constituent companies.
But the case isn't entirely clear cut. Many think the exclusion should remain in place, pointing to the illiquid nature of the vast majority Aim shares and suggesting that Isa inclusion could lull people into a false sense of security over their inherent risks. And, opponents of the move say, although gains would enjoy the same protected from capital gains tax, it would also mean losses could not be offset against taxable gains.
What’s more, Aim-traded shares already enjoy another useful tax break, exemption from inheritance tax. This could be removed if Aim shares are offered an alternative tax break.
