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The era of “set and forget” estate planning utilising AIM is over. As of 6 April, the tax advantage that once shielded AIM portfolios from inheritance tax has been rewritten. For investors holding these assets, the junior market has gone from a defensive tax haven to 20% inheritance tax liability on the first pound.
While other assets that attract inheritance tax relief via Business Relief — such as business assets or EIS shares — currently receive 100% relief up to a £2.5m cap and 50% beyond it, the government explicitly excluded shares traded on AIM from full relief.
Under the 2026/27 rules, AIM shares now qualify for only 50% relief. This creates a tax trap that can’t be planned away with the £2.5m allowance.
| Asset type | Relief on first £2.5m | Relief above £2.5m | Effective inheritance tax rate |
|---|---|---|---|
| AIM-listed shares | 50% | 50% | 20% (From £0) |
| Unquoted EIS shares | 100% | 50% | 0% (Up to £2.5m) |
| Unquoted SEIS shares | 100% | 50% | 0% (Up to £2.5m) |
The migration toward the Enterprise Investment Scheme comes down to a regulatory distinction: “listed” vs “unquoted” assets.
EIS-qualifying companies are unquoted trading companies, which means they remain eligible for 100% Business Relief on the first £2.5m of an estate. AIM doesn’t. That’s the entire calculation.
Since April, advisers have seen the reallocation start. Investors who held AIM specifically for IHT purposes are moving into diversified EIS funds to reclaim the 100% relief status.
The shift to EIS isn’t just about preserving relief. Because unquoted companies retain the 100% allowance up to £2.5m, investors can build portfolios that remain fully IHT-shielded while accessing the scheme’s other features: 30% upfront income tax relief (a £100k investment effectively costs £70k), loss relief of up to 45% for higher-rate taxpayers (meaning a £1 loss costs 38.5p after relief), and exposure to the 2023–2025 cohort of UK startups now reaching growth stage. Tax treatment depends on individual circumstances and may be subject to change.
The traditional objection to switching from AIM to private markets was concentration risk. The Access EIS Fund tackles this by building portfolios of 30+ companies rather than stock-picking 5–10 names. The approach is designed to capture the power law returns of early-stage markets, where a small number of breakout companies drive the majority of fund performance.
The April 2026 rule changes have turned every pound in an AIM portfolio into a 20% tax liability for your estate. For investors seeking to preserve 100% relief, the restructuring window is now open.
SyndicateRoom’s EIS Guide covers the benefits and risks of investing in EIS-eligible companies, and discusses the tax relief available to investors through the scheme.
Download our guide, “Understanding EIS: a guide to tax-efficient investing”
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