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Weekend reading: Petition to end the ban on AIM shares in ISAs

Weekend reading

Some good reads from around the Web.

I don’t know how many of you buy shares listed on the Alternative Investment Market, but I am sure that if you do you’ll find the ban on holding AIM shares in an ISA as annoying as I do.

The theory is that AIM shares are too risky for ISAs. But given that you can hold everything from leveraged ETFs to foreign-listed mini-miners in an ISA, that theory is clearly poppycock.

Even more ridiculously from the ‘risk’ perspective, you can hold AIM shares in a Self Invested Personal Pension (SIPP). You’d imagine if safety was the top priority, then pensions would come first.

There are plenty of very attractive shares on AIM, which UK stock pickers can’t ignore in their potentially futile quest to beat the market. There are plenty of basket cases, too, but that’s all part of the risks of stock picking.

The reality is surely that AIM shares were barred from ISAs because they used to have other decent tax advantages. The only one that survives is an obscure inheritance tax benefit that is solely used by the rich and their advisers in estate planning.

Now, I have nothing against the rich nor tax avoidance in principle (as opposed to tax evasion) but I happen to think inheritance tax is pretty fair as taxes go (the victim is dead!)

Anyway, it’s a pretty pitiful reason to maintain the ban.

I was pleased therefore to see a new petition to end the ban on AIM shares in ISAs has been submitted to the Government’s e-petition site.

There’s no chance at all it will make the required 100,000 signatures to trigger a government debate – you need to be lobbying to cut somebody’s head off to get that sort of support from the baying masses.

Perhaps 10,000 signatures might embarrass a mandarin into doing something sensible, though.

From the blogs

Deal of the week: I’ve just started What You See Is What You Get by Alan Sugar, Lord of Amstrad. It’s half-price in paperback if you fancy it.

Mainstream media money

  • No market for young men, says Grantham – Market Watch
  • The hidden benefits of Big Government – New York Times
  • Pensions slump as shares fall [rebalance ahead, guys!] – BBC
  • Five indexing pitfalls Morningstar
  • Gold, unhinged – Motley Fool
  • Millions pay ‘extraordinary’ pension fees – FT
  • Synthetic ETF risk list [our own from April]FT
  • The hassles of holding share accounts overseas – FT
  • The exhausting search for a safe haven – FT
  • Cash can beat ‘cautious’ funds [I agree]FT
  • Will a ‘top stocks’ screener beat the market? – FT
  • Halifax introducing a premium bond-style draw – Telegraph
  • Gold slumps 9%, despite market turmoil – Telegraph
  • World prays for an economic miracle – Independent
  • How to use credit cards sensibly – Independent
  • Rural downsizers go into debt – The Guardian

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{ 4 comments… add one }
  • 1 Alex Simmons September 24, 2011, 11:32 am

    Monevator,
    I’m glad someone has started a petition – the rule is clearly ridiculous, especially as you can hold all manner of synthetic and leveraged ETFs as you rightly point out.

    I’ve posted the link on FB and would encourage others to do the same.

  • 2 The Money Grower September 24, 2011, 2:46 pm

    Many thanks for the mention, Mr Monevator. B-)

    TMG

  • 3 Faustus September 24, 2011, 3:25 pm

    Great to raise this and very happy to sign – there are far too many ISA restrictions at present. The AIM ban is one of the most irrational.

    I’ve also found restrictions though on ETFs, particularly inverse and leveraged ones. In spite of the provider declaring them to be ISA eligible my ISA platform refuses to admit them.

    Funds from ETF Securities have been particularly problematic.

  • 4 Andrew September 25, 2011, 1:33 pm

    Good spot monevator, I’m off to sign now. Also good to hear someone supporting inheritance tax as it must be one of the most economically rational ways for government to raise funds.

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