Aim boss makes plea to boost market's appeal after inheritance tax blow
The boss of London's junior stock market has called on the Government to help halt an exodus of companies listed in the City as he warned over the impact of its move to cut inheritance tax relief on Aim shares.
Marcus Stuttard, head of Aim and UK primary markets at the London Stock Exchange, urged the Government to reinstate 'financial incentives' for Aim investors after last autumn's Budget revealed plans to slash inheritance tax (IHT) relief on Aim-listed stock from 100% to 50% from April next year.
Aim has suffered a raft of firms quitting the market in recent years as part of a wider shift away from London towards overseas rivals and as firms are bought out by foreign competitors or taken private.
More than 60 firms – with a market cap of over £12 billion – have already announced plans to leave Aim in 2025 as they look to move to the main market, delist or are bought out.
As Aim celebrates its 30th anniversary on Thursday, Mr Stuttard told the PA news agency that the Government can help stop the outflow of firms on London's beleaguered market, with 'more companies leaving than joining in the last two years'.
He said the cut to IHT relief was a major blow.
'One hundred per cent relief has been and used to be really important to Aim,' he said.
'We are calling on the Government to make sure there's certainty… with financial incentives to support Aim.'
He also backed Government plans to increase pension fund investment in UK stocks, saying it was crucial that 'domestic investors back our domestic economy'.
He told PA: 'International investors understand the quality of our small businesses – we need our own pension funds to be backing that opportunity.
'It's vital that our UK pension funds back the UK economy.'
The Aim – or Alternative Investment Market – was launched in June 1995 to give small and medium-sized firms access to capital.
In the 30 years since, it has admitted more than 4,000 companies and raised over £136 billion.
There were about 1,700 businesses listed on Aim in 2007, but this has dwindled to fewer than 700.
Some of this is down to costs of listing and onerous rules and regulations.
Mr Stuttard said the group is working on a discussion paper to ask firms how Aim could change and evolve and what are the current downsides of listing on the market.
He said 'nothing is off the table' in terms of what could be looked at, with the market keen to see the consensus for a way forward.
He said it is clear there is still a strong need for Aim to help companies get access to capital to grow without resorting to selling.
'From start-up to initial public offering (IPO) to big global business, we want to provide companies with a range of choice of financing options so they don't get sold too early,' according to Mr Stuttard.
'Aim is a really important part of the UK economy and the UK capital markets,' he added.
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