Stellar AiM Inheritance Tax Service - ISA

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  • Generalist
    Sector
  • IHT
    Investment type

The Stellar AiM ISA Inheritance Tax (IHT) Service is discretionary managed, with the goal of supporting advisers to protect their clients’ legacies from the financial burden of inheritance tax.

Provided that the portfolio is held for a minimum of two years and at the time of death, our Stellar AiM ISA IHT Service ensures a simple way of retaining income tax and capital gains relief – while simultaneously navigating the often complex landscape of inheritance tax planning.

As part of this service, capital is invested in a diversified portfolio of approximately 40 companies that are quoted on the Alternative Investment Market (AiM) of the London Stock Exchange. The government offers generous tax breaks to encourage investors to save, and one of the most popular ways is through an Individual Savings Account (‘ISA’) – with the goal of providing investors with a blend of capital preservation and growth.

The service is managed by award-winning AIM manager, Stephen English.

https://www.stellar-am.com/videos/stephen-englishs-three-key-disciplines/

Highlights

  • You continue to own and have access to your capital.
  • The services offer medium term capital growth potential.
  • Our services are diversified across a wide range of asset classes to protect against market risk.
  • Transparent fees and a clear investment strategy.
  • Thoroughly researched investments, compliant with all current legislation.

Investment strategy

Honed over more than a decade, we believe that a robust process stacks the odds in our favour when it comes to delivering superior investment returns. Over time a good (bad) process will assert itself and lead to strong (weak) performance. As such we are process not outcome driven. This helps to deliver results that are repeatable over the long-term.

The dichotomy between process and outcome is best framed in a matrix; a good outcome can be arrived at through good luck in the short-term but only over the long-term through a sound process. No process should, however, be immutable and we strive to continually improve and refine it.


Multi-Discipline: 

We conduct rigorous due diligence when assessing the risk/reward of all investments. This encompasses three key aspects:


• Quantitative - Underwriting the investment case via a thorough analysis of accounting numbers.


• Qualitative - Assessing the culture, strategy, business model and myriad other relevant busines qualities. In particular we seek managers possessing intelligence, integrity and (aligned) incentives.


• Psychological – Appraising investors’ sentiment in a stock to identify where fear or greed has become excessive and by extension where a share price has deviated too far from its intrinsic value.


Alpha Generators: Markets are mostly efficient most of the time, yet within that there are pockets of inefficiencies that we look to exploit to generate added value (alpha) for clients:


• Value plus Momentum - Value alone is not enough; often a stock is cheap for reason. That is why we also target share price momentum, or, in other words, cheap assets going up in value.


• Founders’ Mentality - The portfolio will have a significant minority of the shares held by insiders who run the business. This fully aligns interests and typically leads to more sustainable businesses, especially if run by a rare sub-set of managers whom we call intelligent fanatics.


• Blended approach - The future is inherently unknowable, as such we build the portfolio for a range of different outcomes by blending stocks that ‘zig and zig’ at different times. Key to this is having dual style exposures with around two-thirds of the portfolio invested in Growth at A Reasonable Price (GARP) type stocks and a third invested in more Value/Special Situation opportunities.


• Market cap. arbitrage - We see particular value in the smaller end of the AIM market (sub £200m) which is less well researched and provides more frequent and larger pricing anomalies to take advantage of. Buying when smaller, under the radar and cheap and selling when they grow larger, more coveted and more expensive ensures that the portfolio will be tilted more to “tomorrow’s winners, not yesterday’s”.


We seek to maximise client returns and will cap the strategy to maintain our unconstrained, go-anywhere ability. To fish only where the fish actually are.

Key team

Stephen English - Investment Director

Stephen joins Stellar having previously worked at Blankstone Sington since 2002, where an early grounding on the dealing desk paved the way for a fascination with markets, how the ‘invisible hand’ of supply and demand could move prices and how efficient dealing can add value.


With a background in art (good drawer/awful painter) and an interest in psychology Stephen believes that small-cap investment is more art than science. An avid student of the market, he has authored his own 12-page investment philosophy which was well received by professional and retail readers alike. When it comes to the stockmarket, Stephen says ‘when you find the key, they change the lock’ which drives a zeal for continual improvement.


Never one for fads, increasingly he feels the Qualitative aspects of investment will be a key driver of alpha, where anything Quantitative and that can be automated will be. Quality investing to Stephen is as much, if not more so, about the management of a business, and he aligns the portfolios to founders who maintain the owners’ eye and have a superior problem solving ability over peers with no alignment of interest. A strong culture is vital; after all ‘character is destiny’. Stephen also likes an aphorism or two!


With a fast-growing reputation as an independent thinker, his musings are regularly featured in the press, including What Investment, Professional Advisor and MoneyWeek. Investment is one of the purest and most rewarding endeavours in Stephen’s opinion and he is a firm believer in giving back to an industry he is so passionate about. With an irreverent style yet with deep thoughtfulness and humility he has delivered two keynote presentations at the Mello private investor events providing the tools on how to better invest.


Stephen is a CFA Charterholder, a devoted Warrington Rugby League fan and a wide-ranging reader.

Phil Kirwan - Portfolio Manager

Phil joined Stellar in September 2020. Phil fulfills various roles including dealing, investment management, model portfolio management, and IHT portfolio management, often simultaneously.


The key to successfully juggling these roles had been by using his problem solving and technical skills to tailor systems and procedures to maximise efficiency and accuracy. Committed to delivering the highest standards possible, Phil’s focus has been to improve the delivery of core services and provide operational scalability across both the front and back office.


From proposals, to implementation, to training Phil has honed his on-the-job experience to create a niche role.


He holds the Chartered Wealth Manager qualification and outside of work is a keen tennis player. Currently, he is taking full advantage of the, no doubt short, opportunity to enjoy the successes of his beloved Liverpool FC.

Daryl Hine - Chief Operating Officer

With over 30 years business experience and a proven track record in financial services, Daryl has provided both strategic insight and operational leadership across a range of businesses.


He has experience with multinational PLCs and start ups but has a passion for SME’s – particularly the people side of the team. He enjoys getting to the essence of any problem, whether it’s team building, lead generation or product development related, and working with the right person to come up with the right solution.


His qualifications include holding a Diploma in Neuro Linguistic Programming (NLP) as well as an MBA in Business Administration and Management from Lancaster University – one of the UK’s top 3 business schools.


Outside work and education, Daryl is a keen globetrotting traveller and loves all things tech, especially when keeping an eye out for the next big market disrupter.

Products and services

Stellar AiM ISA is a simple estate planning solution with the following key features:

Tax-efficient: IHT relief after two years and can be held in an ISA

Diversified: Portfolio of forty AIM quoted companies

Control: Investments made in your name so you keep full control

Transparent: Simple investment strategy and fee structure

Growth: Strong perfomance history over nine years

Transferring existing ISA investments is an easy and simple way to improve your tax efficiency as you retain income and capital gains tax relief but will then benefit from IHT relief.

Risks

There are never any guarantees in the world of investment, so it’s essential that advisers make their clients aware of the risks. Our Inheritance Tax Services are not suitable for everyone, so here’s a summary of what an investor needs to know before getting involved – alternatively, click here for more information.


The value of a portfolio, or any income derived from it, can fluctuate.

There is no guarantee that the full value of an investment will be returned, or that sufficient investments in qualifying business activities will be made within the expected timetable, or at all.


Qualifying business activities are not certain.

Qualifying business activities may subsequently cease to qualify for Business Relief. In such cases, Business Relief could be lost or delayed.


Tax reliefs are not guaranteed

The rate of tax, tax benefits and tax allowances are subject to change and are also dependant on personal circumstance. Plus, any changes to what constitutes a qualifying business activity may have a material adverse effect on the value of the business, or Stellar’s potential to achieve the objectives of the service.


Conflicts of interest

The interests of one group of investors may not coincide with another, or an interest of Stellar. In the event of a conflict, Stellar’s investment committee will work to ensure it is resolved fairly and in lie with our conflict policy.


Investments are long-term and high risk.

Interests in the AiM companies are not liquid so although an investor can request a withdrawal from their portfolio, there may be a delay. This means that they may be unable to sell immediately, or will potentially fail to receive the best price. AiM companies are also significantly more volatile than larger companies on LSE.


Past performance is no indicator of future success.

Documents

Only registered investors can access the documents. Receive access by registering for an account.


The content above has been provided by Stellar Asset Management Limited who are authorised and regulated by the Financial Conduct Authority under firm registration number 474710.