New powers granted in the Budget to the UK’s tax authorities, HM Revenue and Customs, to award Recognised Stock Exchange status could lead to investors in London's AIM market losing some tax benefits, according to Clive Mackintosh, tax partner and head of private clients at PricewaterhouseCoopers. Currently AIM is defined as unlisted which means shares listed on the market qualify for the higher rate of taper relief for capital gains purposes, and profits are exempt from inheritance tax. But the designation of AIM as an RIE, meaning that it would no longer be deemed an unlisted exchange, could be damaging for investors, according to some commentators. “It should be noted that were HMRC to designate the Alternative Investment Market as a recognised stock exchange the tax benefits available such as capital gains tax business asset taper relief and inheritance tax business taper relief would be lost," said Mr Mackintosh. "This would make AIM less attractive to investors and remove the benefits from those already investing in the market," he said. The London Stock Exchange, which operates AIM, has issued a statement to counter speculation that the new HMRC powers will necessarily lead to the loss of tax relief for AIM. "There has been some third party comment that this change may affect the availability of tax reliefs for shareholders of qualifying AIM companies. This is not the case and has been confirmed by the government. The existing tax reliefs that apply to shares admitted to AIM will continue to apply," said the exchange.