Observers are criticising many AIM companies and their advisers for failure to declare in their issuing prospectus whether they qualify for what is known as reinvestment relief. Examples of AIM prospectuses which make no mention of reinvestment relief include Lawrie Group and Chartwell International Group.
The Old English Pub Company, however, makes it clear, in two separate references, that the directors have been advised that the company qualifies for reinvestment relief.
Zahir Fazal, an accountant with Clark Whitehill, said: "I can't help feeling that nominated advisers for AIM companies could be looking closer at this issue, in the prospectuses."
When AIM was launched last June, one of the attractions it held out was the right for private investors to claim reinvestment relief. The tax break applies to investors who had holdings in unquoted shares. If they had capital gains, they were allowed to transfer their untaxed proceedings into other unquoted shares.
Because AIM is an unquoted market, the Inland Revenue agreed to treat investment in AIM companies as for unquoted companies. Advisers, however, fear that some AIM investors are losing out through ignorance of this potentially useful arrangement. With AIM reaching a wide audience, many also want the complexities of Inland Revenue rules for reinvestment relief simplified.