AIM ISA IHT Portfolios

Did you know ISAs are not tax free forever? Contrary to what many think, they could be liable to inheritance tax. So 40% of what you’ve carefully saved over the years could end up in the taxman’s coffers, rather than go to your loved ones. 

Until recently there was no way to protect ISAs from IHT without losing the tax benefits of tax-free growth and income. This changed in 2013, for those prepared to take greater investment risk.  

A rule change that could help make your ISA IHT free 

Since 2013 you have been able to invest your ISA in AIM stocks. Many – but not all – qualify for something called Business Property Relief, BPR in short. If you hold shares in BPR-qualifying companies for at least two years and still hold them on death, you should be able to pass them on IHT free. Remember tax rules can change and benefits depend on circumstances. Moreover, investing on the AIM market is more risky than investing on the main stock market and you could lose the entire value of your investment.

What could this mean for you? 

There is nothing stopping you from selecting AIM stocks yourself. But how do you ensure they qualify – and continue to qualify – for the relief? Do you have time to research and pick the right stocks? AIM is a market of extremes: some shares perform outstandingly, many poorly. 

This is why more experienced investors are choosing to invest in AIM Inheritance Tax ISA portfolios, AIM ISAs in short. That's a portfolio of AIM stocks selected and managed by a professional manager and held in an ISA. Remember, even though a manager is making the decisions for you, the value of your investment will still go down and up and you could get back less than you invest.

When you make this year’s ISA subscription into an AIM ISA you might be able to pass it on to your loved ones without them paying a penny of IHT on it. 

  • Invest your ISA allowance (currently £20,000)
  • Transfer unlimited amounts from existing Stocks & Shares or Cash ISAs
  • Keep control of your portfolio – take cash out if you need
  • Potentially pass it on IHT free after two years – a saving of 40%
  • Keep the ISA benefits of tax-free growth and income

Please note: AIM ISAs invest in small companies, which are generally more volatile and illiquid than larger companies and much higher risk. Neither your capital nor the tax savings are guaranteed. Moreover, tax rule can change and benefits depend on circumstances. Please read carefully all the benefits and risks to decide for yourself if you should invest. Our service is not advice. If you’re unsure, please seek advice. 

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Octopus AIM IHT ISA

This AIM IHT ISA, the UK's largest, is managed by an experienced fund management team. Companies sought have proven track records, a strong market position and/or a clear growth opportunity.

£1.7 billion £700.0 million 1.0% 0.25% 0.75% 2.0%  
Puma AIM IHT ISA

The Puma IHT AIM ISA is a discretionary portfolio run by Justin Waine and has a three years track record. It holds around 20 AIM stocks, often family businesses or founder controlled firms.

£28.0 million £316.0 million 4.0% 3.0% 1.0% 2.0%  
Stellar AIM ISA

This AIM IHT ISA is a portfolio of 40 stocks, with an optional insurance policy

£70.0 million £851.0 million 0.5% - 0.5% 0.75%  
Unicorn AIM IHT ISA

Unicorn is a specialist smaller company fund manager. Investment will be made into 25-40 AIM listed companies, most of which will already be held in either Unicorn's VCTs or Smaller Company fund. Unicorn manages over £313 million in AIM listed companies.

£23.0 million £409.0 million 4.5% 3.5% 1.0% 2.0%