AIM Shares & ISAs
I have nearly all of my trading pot inside ISAs - and if you have reasonable trading capital, so should you!
As I'm sure most of you are aware, you can stick £7k in per year and over the years build up a good pot of tax-free money. The only problem with ISAs is you can't put AIM stock inside - for some reason this is barred from ISAs. I have no idea why and it seems a stupid rule to me!
However you can put some AIM stocks inside an ISA if they have a dual listing on another stock exchange. The trouble is that this is a bit of a grey area; some brokers are more relaxed than others about allowing you to place certain AIM shares inside the tax-free wrapper.
How do you find out which AIM shares are allowable?
Well, you can simply put in a "dummy" or a pretend buy order online inside an ISA and see if your broker allows it or not. Basically it is always worth a try!
The area is so grey that The Investors Chronicle ran a feature with a list of shares it thought were dual listed and therefore eligible for ISAs, only to print a retraction last week because AIM shares listed on a German exchange were not eligible. The magazine now reckons there are about 150 AIM shares allowable in an ISA. This seems to include two of my favourite trading stocks: Central African and Tanfield.
Some time ago I had a battle with a couple of stockbrokers over whether Irish stocks such as Dragon Oil were allowed - and they are, so long as they are listed on the London Stock Exchange. I think it really is time for the authorities to put out an official list of AIM stocks allowable in ISAs in order to halt any of the current confusion. It can't be that difficult can it?
The markets have calmed down a bit but I'm glad I picked up a few stocks when they were really tumbling. I got some bargain basement Burren Energy, Dragon Oil and Croda. Currently I do believe it is worth snapping up a bit of stock during a bout of weakness.
I've also had a bit of luck with an announced bid for Birse, giving me a sudden 30% upside! I am now hoping for a bid for the airport services company Watermark.
Let's hope things continue to stay much calmer over the summer.