The Octopus AIM Inheritance Tax Service has been managed by the Octopus UK Smaller Companies investment team since 2005. Octopus Investments as a whole manages £13.4 billion on behalf of its clients (December 2023) and the 13-strong Quoted Companies team manages £1.9 billion in UK quoted companies across the Service, Octopus AIM VCTs, and three quoted funds. 

The Octopus AIM Inheritance Tax Service alone manages £1.5 billion. The team targets more established AIM-quoted companies with strong market positions and growth potential.

  • Portfolio of 20-30 stocks
  • Bias towards large and well-established growth focussed companies
  • Minimum investment £20,000 (£25,000 outside an ISA) – you can apply online (ISA only)
  • Apply in an ISA: top up or make a new subscription online using the link below. To transfer existing ISAs, please download, print and complete the ISA Transfer Form and post it to us.
  • Apply outside an ISA: please download, print and complete the application form and post it to us

Important: The information on this website is for experienced investors. It is not a personal recommendation to invest. If you’re unsure, please seek advice. Investments are for the long term. They are high risk and illiquid and can fall as well as rise in value: you could lose all the money you invest.

The manager

The AIM IHT Service is managed by a 13-strong investment team which has more than 150 years of industry experience and oversees £1.9 billion in quoted investments across all Octopus products (March 2024). 

The team is headed up by Richard Power and Kate Tidbury. Kate first joined Octopus as a fund manager of smaller companies in 2008, while Richard joined Octopus in 2004 and has worked in smaller company investing for over 25 years. 

The team conducts more than 850 meetings a year to help identify what they believe are the best investment opportunities. This level of activity may be hard to replicate by smaller AIM IHT providers. The dedicated investment resource is a key differentiator for the Octopus AIM IHT service, in our view. 

Overall, Octopus Group manages £13.4 billion on behalf of over 63,000 clients (December 2023). 

Octopus will hold your shares on your behalf using its own nominee company.

Meet the manager: Watch our interview with Richard Power


Investment strategy

The Service's buy list typically includes 20-30 stocks at any one time.

Octopus looks for established firms with growth potential and one or more of the following characteristics:

  • Strong market position or global leader in its field 
  • Scalable growth-focused business model 
  • Proven management team with a successful track record 
  • Strong balance sheet, preferably showing profitability 
  • High level of recurring revenues and earnings visibility 

New investors will receive shares in the companies on Octopus’ buy list at the time of their investment.

Companies are sometimes moved from the buy to the hold list for a variety of reasons. This means they will not be included in newer portfolios but will be retained in existing portfolios. Companies will only be removed from investors’ portfolios if the managers feel the outlook for the company has significantly deteriorated.

Current portfolio overview

One of the key tenets of the Octopus AIM IHT Service’s investment strategy is to back businesses with strong market positions. Therefore, companies in the portfolio tend to be larger than one might expect, with average market value of £615 million (March 2024).

Currently, the buy list comprises of 24 companies the team deems suitable for investment. Whether these stocks are included within a specific client’s portfolio – and in what size – will be determined at the discretion of the investment team based on liquidity and market conditions. As this is a discretionary service, each client portfolio is slightly different. 

The buy list currently has a bias towards industrial support services and software & computer services.

Currently 12.5% of the buy list has a market cap greater than £1 billion with none valued less than £250 million.

The charts below show the sector and market capitalisation breakdown for the current buy list.

Sector breakdown (%)

Market capitalisation breakdown (%)

Source: Octopus Investments, as at 31 March 2024

Examples of portfolio companies

Midwich-Group-Octopus-AIM-ISA.jpgMidwich Group

Founded in 1979, Midwich Group distributes audio visual (AV) technology for over 800 brands, including Samsung, LG, and Sony.

Midwich allows vendors to easily connect to a fragmented customer base without the need for in-house logistics, sales and marketing, and technical support. Instead, Midwich uses its own technical expertise and extensive product range to serve more than 24,000 customers, mostly professional AV integrators or resellers. 

In the year to December 2023, Midwich reported revenues of £1.3 billion, up 7.1% on the previous period. The group also reported record gross profit margin of 16.8% (15.3% in 2022) which it attributed to strong technical products sales. 

Octopus is the group’s third largest shareholder (April 2024). The market capitalisation of the Group is £444 million (March 2024).


Boku is a billing platform which connects merchants to mobile network operators using direct carrier billing (DCB) to provide mobile phone users with an alternative payment method. The Group’s technology turns a consumer’s phone number into a convenient and secure payment method, with purchases added to their phone bill or a pre-paid balance. 

Boku is currently live in over 70 countries and processes more than $10 billion in payments annually. It counts some of the world’s largest entertainment and e-commerce brands as clients, including Google, Amazon, Microsoft, and Spotify. 

In the year to to December 2023, the Group recorded revenues of $82.7 million, up 30% compared to the year prior. Operating profit rose to $9.7 million, compared to $8 million in 2022. The Group saw particular success from its expansion into domestic payment systems, i.e. not part of a global network such as Visa or Mastercard. In the year, revenue from LPM transactions increased 152% to $16.5 million.

Octopus Investments is the company’s largest investor (March 2024). The market capitalisation of the company is £554.5 million (March 2024). 

Staffline Group

As is to be expected, not all investments work out. One example is Staffline Group. 

Outsourcing specialist Staffline Group saw its shares suspended in 2019 following a 46.0% decline in its share price. This was due to a delay in releasing its full-year results following allegations of improper invoicing and payroll practices. Trading resumed in March 2019 following the company's refinancing, and continue to trade at a fraction of what they were worth in early 2019 as business performance has been uneven. 


The Octopus AIM Inheritance Tax Service was launched in June 2005. The chart below shows performance over five years compared against a peer group of other AIM ISA portfolios available via Wealth Club. Like other IHT portfolios, this is a discretionary managed service so each portfolio is likely to be different. 

Five-year cumulative performance to 31 March 2024

The default view is the performance for this particular offer. You'll be able to see the performance of other AIM ISA offers if you click on the portfolio names above. Source: Octopus Investments and other AIM ISA managers. Compounded median monthly returns of all available Octopus AIM Inheritance Tax Service portfolios. Performance is shown net of fees, excluding initial charges, with dividends reinvested, based on the average portfolio performance across the service, except for Puma which shows the performance of one example portfolio. Past performance is not a guide to the future. Dividends are variable and not guaranteed.

Five-year discrete performance

AIM IHT portfolio YTD 2023 2022 2021 2020 2019 Five years to 31 Mar 2024
Octopus AIM IHT -2.4% -7.1% -32.2% 18.4% 0.5% 21.8% -17.8%

See five-year discrete performance comparison of all available AIM IHT portfolios

Source: AIM ISA managers (31 March 2024). Performance is shown net of fees, excluding initial charges, with dividends reinvested, based on the average portfolio performance across the service, except for Puma which shows the performance of one example portfolio. Past performance is not a guide to the future. Dividends are variable and not guaranteed.

Access to your investment

Investments in this portfolio are for the long term. However, if your circumstances change, you can sell some or all of your shares, although sometimes this can take a while depending on market conditions and liquidity. You can arrange to take regular withdrawals from the account, which you can change or stop at any time. Any amount you withdraw will no longer be IHT free. Withdrawals may result in a Capital Gains Tax liability unless held in an ISA.

Risks – important

This, like all investments available through Wealth Club, is only for experienced investors happy to make their own investment decisions without advice. Those considering AIM Inheritance Tax Portfolios should be comfortable with the significant risks of investing on AIM.

AIM IHT portfolios should only form part of a balanced portfolio. Your capital is at risk and you should not invest money you cannot afford to lose. If a service is managed by a small investment team, it could create key person risk. The fewer the companies included in the portfolio, the higher the risk of loss if things don’t go to plan. 

AIM stocks can be hard to sell, particularly at the smaller end of the market, and can be illiquid. AIM shares can be very volatile especially if the market falls sharply. The difference between the buying and selling price (spread) of AIM shares is often wider than the spread for shares listed on the main market. 

Eligibility for BPR, based on current rules, is assessed at the date of death and will depend on the companies in the portfolio remaining qualifying. Broadly speaking, you will need to have held a BPR qualifying stock for at least two years and still hold it on death to qualify. Tax rules can change and benefits depend on circumstances.

Before you invest, please carefully read the Risks and Commitments and the offer documents to ensure you fully understand the risks. 

This is the largest AIM IHT portfolio. The manager may find itself less able to act as quickly as smaller AIM ISA providers, which could impact the fund if market sentiment changes or if AIM rules change. 

In recent months, there have been widely reported rumours that the government might change or abolish IHT. It is currently unknown if and when any decision might be announced.

Charges (ISA)

A summary of the main charges and savings for an investment within an ISA is shown below. If you wish to invest outside an ISA, please see the provider's documents. The investment may have additional charges and expenses: please see the provider documents for more details. If you would like a full breakdown or a personal illustration, please let us know.

Full initial charge 1%
Wealth Club initial saving 0.25%
Net initial charge through Wealth Club 0.75%
Annual management charge 2%
Administration charge
Dealing fee 1%
Performance fee
Exit fee
All fees and charges are stated exclusive of VAT, which may be applicable in some cases.

See example of the total charges over 5 years

Our view

This is a longstanding portfolio managed by a large, well resourced and experienced team. At £1.5 billion assets under management, it is the largest AIM IHT offering by some distance.

In our view, this scale has several advantages. Firstly, the level of funds under management should ensure the team has excellent access to AIM company management teams. Secondly, it should support a well resourced investment team capable of producing the breadth of high-quality research needed to build an AIM portfolio. However, scale also has disadvantages: the portfolio may be less nimble than its smaller peers, and some smaller company opportunities may be out of reach of the service.

The portfolio’s fees are higher than some of its peers. The minimum of £20,000 could make it a contender for this year’s ISA subscription.

See five-year performance of shares mentioned above

Wealth Club aims to make it easier for experienced investors to find information on – and apply for – investments. You should base your investment decision on the offer documents and ensure you have read and fully understand them before investing. The information on this webpage is a marketing communication. It is not advice or a personal or research recommendation to buy any of the investments mentioned, nor does it include any opinion as to the present or future value or price of these investments. It does not satisfy legal requirements promoting investment research independence and is thus not subject to prohibitions on dealing ahead of its dissemination. 

The details

Portfolio size
£1.5 billion
Average market cap
£615 million
Initial charge
Saving via Wealth Club
Net initial charge
Last updated: 9 May 2024

News about AIM ISA IHT Portfolios. Read all