EIS, AIM and IHT query

A question from a colleague that we think we know the answer to but struggling to find confirmation in writing. Can anyone help pretty please?

Distributions from an EIS total £10k. We invest £20K into a new AIM portfolio (£20k the minimum top up) to retain the IHT relief already attached on the £10k.

Client receives another distribution of £25k from the EIS - does the 'other' £10k he has already invested in the AIM now automatically receive IHT relief? We need confirmation in writing for compliance.


  • I would agree that the first £10k distributed and subsequently re-invested meets the requirements under IHTM25311 - Business relief: Replacement property: Conditions to get immediate IHT relief.

    However, (unlike for Business Asset Roll Over) there is nothing I can find in the relevant HMRC manual which allows for this where the new investment is made before / in anticipation of EIS distribution / sale.

    On this basis I would say that the top up £10k does not get immediate IHT benefit.

  • In my view the extra £10k did not replace other property qualifying for business relief so I think that extra 10k doesnt; meet the ownership test so needs to be held for 2 years to get relief

  • Could you not just withdraw the £10k from the AIM portfolio that doesn't qualify when the EIS distribution is made and then add £10k from the EIS distribution to the AIM portfolio?

    Assuming that the AIM provider will allow this?

    A bit of a faff right enough.

  • AmyAmy Member

    Bit late but thank you all, much appreciated!

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