According to Close Brothers Asset Management, since the government’s announcement last July that AIM-listed shares could be held in ISAs from August 2013, AIM share values have risen dramatically, pushing the average market capitalisation of AIM stocks to £70m – the highest since May 2011.

The FTSE AIM All Share climbed from a low of 685 points at the tail-end of June to climb to 882pts recently, before troubles in emerging markets knocked a chunk off markets in the last week.

Close said the asset class could get another lift shortly, as holding AIM shares within an ISA will soon be one of the most tax-advantaged of all investments, allowing investors ways to make tax-efficient savings and inheritance tax planning at the same time.

ISA investments via AIM shares will soon benefit from no stamp duty as it is due to be abolished in April this year, while there are also a number of other tax exemptions coming in, Close said.

For instance, holding qualifying AIM shares within ISAs will allow investors to utilise Business Property Relief (BPR), a form of inheritance tax relief, provided they hold the shares for at least two years, and are still invested at the time of death.

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Head of intermediary sales & product management David Muncaster said: “Given that stamp duty on AIM shares is due to be abolished in April this year, holding AIM shares within an ISA will soon be one of the most tax-advantaged of all investments, with no stamp duty, no capital gains tax, no tax on dividend income and, subject to certain criteria, no inheritance tax.”

AIM is not for every investor however, and companies listed on the index often suffer from much greater volatility than larger peers. The amount of coverage on some companies by the analyst community is minimal and investors need to be aware of the risks, Muncaster added.

He said: “The need to tread carefully in AIM is demonstrated by the market’s performance over the last six years (the market collapsed by 60% at the start of the credit crisis and remains well off peaks in 2006 and ’07).

“It is therefore important that if clients are looking to include AIM shares in their inheritance planning, that they have a well-diversified portfolio managed by an experienced, dedicated team.”