Merger Update

JOINT ANNOUNCEMENT

OCTOPUS IHT AIM VCT PLC ("IHT AIM VCT")
OCTOPUS SECOND AIM VCT PLC ("SECOND AIM VCT")

9 JULY 2010

RECOMMENDED PROPOSALS:

     ·     TO REDESIGNATE THE SHARE CAPITAL OF IHT AIM VCT ("IHT AIM VCT SHARE
REDESIGNATION");

     ·     TO MERGE IHT AIM VCT AND SECOND AIM VCT (TO BE COMPLETED PURSUANT TO
SECTION 110 OF THE INSOLVENCY ACT 1986 ("THE SCHEME");

     ·     FOR AN OFFER FOR SUBSCRIPTION TO RAISE UP TO £10 MILLION IN IHT AIM
VCT ("OFFER")


 (THE IHT AIM VCT SHARE REDESIGNATION, THE SCHEME AND THE OFFER (AND MATTERS
RELATING THERETO) TOGETHER "THE PROPOSALS")

SUMMARY

The boards of IHT AIM VCT and Second AIM VCT announced on 13 January 2010 that
they were in preliminary discussions on terms for a merger of the two
companies.  Both boards are pleased to advise that discussions have concluded
and they are today writing to set out the Proposals to their respective
shareholders for consideration.  Both companies are managed by Octopus
Investments Limited ("Octopus").

The Proposals will, if approved, result in a redesignation of the share capital
of IHT AIM VCT, the merger of the companies and the fundraising by IHT AIM VCT,
creating an Enlarged Company with net assets of approximately £33 million
(assuming full subscription under the Offer).

IHT AIM VCT will redesignate its existing A ordinary shares as ordinary shares
("New IHT AIM VCT Shares").  The IHT AIM VCT Redesignation is conditional on the
approval of IHT AIM VCT shareholders and will take place whether or not the
merger is approved and becomes effective.

The merger will then be effected by Second AIM VCT being placed into members'
voluntary liquidation pursuant to a scheme of reconstruction under Section 110
of the Insolvency Act 1986.  Shareholders should note that the merger by way of
the Scheme will be outside the provisions of the City Code on Takeovers and
Mergers.  The merger will be completed on a relative net asset basis (unaudited
net assets as at close of business on the day immediately preceding the
Effective Date (as defined below) and the benefits shared by both sets of
shareholders, with the costs being split proportionately based on the merger
NAVs.  The Scheme is conditional on the approval of the shareholders of both
companies and is subject to the IHT AIM VCT Share Redesignation having been
completed.

The merger also provides an opportunity to launch the Offer to raise up to £10
million to enable IHT AIM VCT to participate in opportunities for investment at
a time in the UK economic cycle which the IHT AIM VCT board and Octopus believe
to be advantageous and will open on 9 July 2010.  The Offer is conditional on
the approval of the shareholders of IHT AIM VCT and is subject to the IHT AIM
VCT Share Redesignation having been completed.

The Scheme is not conditional on the Offer proceeding, or vice versa.

The IHT AIM VCT Share Redesignation, the Scheme and the Offer require the
approval of resolutions to be proposed at the IHT AIM VCT extraordinary general
meeting to be held on 4 August 2010 ("IHT AIM VCT Extraordinary General
Meeting") and, in respect of the Scheme only, the approval of resolutions to be
proposed at the Second AIM VCT general meeting to be held on 4 August 2010
("Second AIM VCT First General Meeting") and the Second AIM VCT general meeting
to be held on 12 August 2010 ("Second AIM VCT Second General Meeting").

The board of IHT AIM VCT also considers it appropriate to adopt new articles of
association, renew share issue and share repurchase authorities, approve the
cancellation of the IHT AIM VCT share premium account and capital redemption
reserve, as well as amend the investment policy and change the name of the
company. It is also proposed to approve a related party transaction with Octopus
in respect of its fee pursuant to the Offer, as referred to below.

BACKGROUND

IHT AIM VCT was launched in November 2005 and has raised £23.6 million (net of
expenses) since inception.  The current objective of IHT AIM VCT is to invest in
a broad range of AIM or PLUS quoted companies in order to generate income and
long-term capital growth. Investments are made selectively across a range of
sectors in companies that have the potential to grow and enhance their value.
IHT AIM VCT has returned £8 million to its shareholders through dividends and
share buy-backs.  As at 31 May 2010, IHT AIM VCT had investments in 35 companies
with an aggregate value of £7.5 million and unaudited net assets of £10.0
million (65.1p per share). As at today's date, IHT AIM VCT has 34 investments.

Second AIM VCT was launched in June 2001 and has raised £27.6 million (net of
expenses) since inception. Second AIM VCT's objective is to provide its
shareholders with tax-free dividends and long-term capital growth by investing
in a diverse portfolio of AIM-listed companies. Second AIM VCT has returned £7.2
million to its shareholders through dividends and buy-backs. As at 31 May 2010,
Second AIM VCT had unaudited net assets of £13.1 million (31.0p per Second AIM
VCT Share) and, in aggregate, investments in 40 companies.  As at today's date,
Second AIM VCT has 38 investments.

VCTs are required to be listed on the Official List, which involves a
significant level of listing costs as well as related fees to ensure the VCT
complies with all relevant legislation. As a VCT becomes fully invested, its net
assets may start to decrease, primarily due to dividends, buy-backs and annual
expenses. As a result, the running costs can become a proportionally greater
burden which may have an adverse effect on the returns generated for
shareholders. A larger VCT should, therefore, be better placed to spread such
running costs across a larger investment portfolio and, as a result, may be able
to pay a higher level of dividends to shareholders over its life.

In September 2004, regulations were introduced allowing VCTs to be acquired by,
or merge with, each other without prejudicing the VCT tax reliefs obtained by
their shareholders. A number of VCTs have now taken advantage of these
regulations.

With the above in mind, the boards of IHT AIM VCT and Second AIM VCT entered
into discussions to consider a merger of the companies to create a single larger
VCT thereby establishing a platform from which further funds could be raised.
The aim of the boards is to achieve strategic benefits and reductions in the
annual running costs for both sets of shareholders.

THE REDESIGNATION

The IHT AIM VCT board proposes to redesignate the share capital of IHT AIM VCT
to simplify its share capital following the return of the B ordinary fund in
2009. The IHT AIM VCT Share Redesignation will be effected by redesignating A
ordinary shares of 0.01p each to ordinary shares of 0.01p each. The number of
shares in IHT AIM VCT held by an IHT AIM VCT shareholder and NAV per share will
not change.

THE MERGER PURSUANT TO THE SCHEME

Both boards consider that this merger will bring significant benefits to both
groups of shareholders through:

  * a reduction in annual running costs for the Enlarged Company compared to the
    total annual running costs of the separate companies;


  * the creation of a single VCT of a more economically efficient size with a
    greater capital base over which to spread administration, regulatory and
    management costs;


  * participation in a larger VCT with the longer term potential for a more
    diversified portfolio thereby spreading the portfolio risk across a broader
    range of investments and allowing for further investment in existing
    portfolio companies; and


  * providing the ability to maintain a buy-back programme and the potential
    payment of further dividend distributions in the future due to the increased
    size and reduced running costs of the Enlarged Company.


The mechanism by which the merger will be completed is as follows:

  * Second AIM VCT will be placed into members' voluntary liquidation pursuant
    to a scheme of reconstruction under Section 110 IA 1986; and


  * all of the assets and liabilities of Second AIM VCT will be transferred to
    IHT AIM VCT in consideration for the issue of New IHT AIM VCT Shares (which
    will be issued directly to shareholders of Second AIM VCT).


Following the transfer, the listing of the Second AIM VCT Shares will be
cancelled and Second AIM VCT will be wound up.

The Scheme is conditional upon notice of dissent not having been received from
Second AIM VCT shareholders holding more than 10 per cent. in nominal value of
its issued share capital.

Annual running costs, excluding management fees, for IHT AIM VCT and Second AIM
VCT are approximately £130,000 for each company or £260,000 in total. These
costs represent 1.3 per cent. of the IHT AIM VCT's unaudited net asset value and
1.0 per cent. of Second AIM VCT's unaudited net asset value, in each case as at
31 May 2010. Both boards consider that this level of continued administrative
annual running costs can be materially reduced through the merger resulting in
benefits to both groups of shareholders.

The aggregate anticipated cost of undertaking the merger is approximately
£238,000, including VAT, legal and professional fees, stamp duty and the costs
of winding up Second AIM VCT. The costs of the merger will be split
proportionately between IHT AIM VCT and Second AIM VCT by reference to their
respective merger NAVs.

On the assumption that the NAV of the Enlarged Company will remain the same
immediately after the merger (and disregarding the payment of the amount
equivalent to three months' notice to the directors of Second AIM VCT and to
Christopher Holdsworth Hunt who will resign as a director of IHT AIM VCT
following the merger as these are one-off payments), annual cost savings for the
Enlarged Company of at least £120,000 per annum (representing 0.52 per cent. per
annum of the expected net assets of the Enlarged Company) are anticipated to be
achieved following completion of the merger. On this basis, and on the basis
that no new funds are raised or investments realised to meet annual costs, both
boards believe that the costs of the merger would, therefore, be recovered
within 24 months.

Both boards believe that the Scheme provides an efficient way of merging the
companies with a lower level of costs compared with other merger routes.
Although either of the companies could have acquired all of the assets and
liabilities of the other, IHT AIM VCT was selected as the acquirer because its
shares, compared to the Second AIM VCT shares, are currently trading at a larger
discount to its NAV (and, therefore, a lower stamp duty cost on the
consideration value on the transfer of all of the assets and liabilities from
Second AIM VCT). It is also believed that there should be a saving in the annual
running costs and a more efficient administration of a surviving company
registered in England and Wales as opposed to Scotland.

Second AIM VCT Shareholders who do not vote in favour of the resolution at the
Second AIM VCT First General Meeting are entitled to dissent and have their
shareholding purchased by the liquidators at the break value price of a Second
AIM VCT Share. If the conditions of the Scheme are not satisfied, the companies
will continue in their current form and each board will continue to review all
options available to it regarding the future of their company.

THE OFFER AND RELATED PARTY TRANSACTION

The IHT AIM VCT board has decided to take the opportunity to also raise up to
£10 million through an offer for subscription of a maximum of 19,000,000 New IHT
AIM VCT Shares. This will provide shareholders and other investors with the
opportunity to invest in IHT AIM VCT and benefit from the tax reliefs available
to qualifying investors in VCTs.

The IHT AIM VCT board believe that:

  * This is an advantageous time in the economic cycle with Octopus beginning to
    see a strengthening pipeline of investment opportunities, at a time when
    prices of assets are still low by historic standards. Funds raised under the
    Offer will be invested, in part, to take advantage of any rally in
    valuations and performance of smaller companies as the pace of economic
    growth accelerates;


  * The Offer should enable IHT AIM VCT to maintain its portfolio
    diversification and continue to maximise the use of funds raised before 6
    April 2006 for investment in VCT qualifying investments with gross assets of
    up to £15 million prior to the investment. IHT AIM VCT maintains a policy of
    distributing realised profits to its shareholders as well as operating a
    share buy-back scheme and there is a risk that over time the size of IHT AIM
    VCT will shrink leaving less funds available for new investments to generate
    future returns. The Offer should, therefore, also provide funds for new
    investments as well as maintaining liquidity for dividends and buy-backs;


  * New offers by VCTs continue to offer attractive tax incentives for private
    investors when compared to other types of tax efficient investment; and


  * The fixed running costs of IHT AIM VCT will be spread over a larger asset
    base, thereby reducing costs as a percentage of IHT AIM VCT's assets.


New IHT AIM VCT Shares issued under the Offer will be at an Offer price equal to
the most recently published NAV of an IHT AIM VCT Share, divided by 0.945 to
take into account Offer costs of 5.5 per cent. and rounded up to the nearest
0.1p per share. The net proceeds of the Offer will be invested in accordance
with the investment policy of IHT AIM VCT.

Octopus will act as promoter to the Offer and be paid a commission of 5.5 per
cent of the gross proceeds raised from which all costs and expenses will be paid
(including initial intermediary commission and trail commission). Any costs
above this will be met by Octopus.

The arrangement to pay a commission of 5.5 per cent., which is being entered
into with Octopus which (as an entity which exerts significant influence over
the IHT AIM VCT and as the investment manager of IHT AIM VCT which is a
closed-ended investment fund) is a 'related party' of IHT AIM VCT under the
Listing Rules, constitutes a related party transaction requiring the approval of
IHT AIM VCT shareholders pursuant to the Listing Rules. The Offer is
conditional, therefore, on the approval of this related party transaction at the
IHT AIM VCT Extraordinary General Meeting by Shareholders.

OCTOPUS

Octopus currently manages 16 VCTs, more than any other fund manager. Financial
advisers voted Octopus ''Best VCT Provider of the Year'' at the Professional
Adviser awards in each of 2007, 2008, 2009 and 2010. The Quoted Small-Cap
Investment Team is one of the most seasoned in the UK small-cap sector with over
80 years of collective experience. It is also one of the largest AIM VCT
specialists. The team sits alongside the rest of the Quoted Team at Octopus
which has a total of £945 million under management.

MANAGEMENT, ADMINISTRATION AND PERFORMANCE INCENTIVE ARRANGEMENTS

Octopus is the investment manager of IHT AIM VCT and of Second AIM VCT and also
provides administration and secretarial services to both companies.  An annual
management and administration fee is payable to Octopus by IHT AIM VCT and
Second AIM VCT of an amount equivalent to 2 per cent. of the net assets of each
relevant company (exclusive of VAT, if any).

Octopus will continue to provide investment management and administration
services to the Enlarged Company following the merger on the same annual fee
basis as above for IHT AIM VCT (ie an amount equivalent to 2 per cent. of the
net assets of IHT AIM VCT (exclusive of VAT, if any).

In support of the merger, and so that all gains may remain with shareholders,
Octopus has already agreed to forego all future performance incentive fee
payments by both IHT AIM VCT and Second AIM VCT and the existing entitlements
have, therefore, been terminated.

THE IHT AIM VCT BOARD

Both boards have discussed and considered the size and future composition of the
IHT AIM VCT board and it has been agreed that Christopher Holdsworth Hunt will
resign as a director of IHT AIM VCT and Elizabeth Kennedy and Alastair Ritchie
(directors of Second AIM VCT) will be appointed as directors of IHT AIM VCT.

The current annual directors' fees for AIM VCT and Second AIM VCT are £42,000
per company (plus applicable employers National Insurance Contributions).
Although the aggregate annual remuneration for the IHT AIM VCT board following
the merger will increase to £55,000 (plus applicable employers National
Insurance Contributions) due to the additional director, the total of the
directors' fees across the two companies will reduce by £29,000 per annum. This
is disregarding the payment of an amount equal to three months' notice to each
of the directors of Second AIM VCT as final directors' fees whilst Second AIM
VCT is in liquidation - the Second AIM VCT directors have agreed to waive all
further directors' fees in respect of Second AIM VCT if the Scheme becomes
effective - and to Christopher Holdsworth Hunt who will, if the Scheme becomes
effective, resign as a director of IHT AIM VCT.

AMENDMENT TO THE IHT AIM VCT ARTICLES

The IHT AIM VCT board proposes to adopt new articles of association to reflect
the IHT AIM VCT Share Redesignation, as well as take the opportunity to update
the IHT AIM VCT's articles of association to reflect the new provisions
introduced by the Companies Act 2006 and shareholder regulations which have come
into force over the last two years and market practice.

AMENDMENT TO THE IHT AIM VCT INVESTMENT POLICY

The IHT AIM VCT board believe that there may be opportunities to invest in
companies that seek pre-IPO funds, participation in which would be in the
interest of its shareholders.  The IHT AIM VCT board have, therefore, proposed a
resolution at the IHT AIM VCT Extraordinary General Meeting to sanction this by
amending the investment policy of IHT AIM VCT.

IHT AIM VCT SHARE ISSUE AND REPURCHASE AUTHORITIES AND CANCELLATION OF THE IHT
AIM VCT SHARE PREMIUM ACCOUNT AND CAPITAL REDEMPTION RESERVE

In order to implement the merger, the IHT AIM VCT board will need to be
authorised to issue New IHT AIM VCT Shares pursuant to the Scheme.  It is also
proposed to renew and increase shareholder authorities at the IHT AIM VCT
Extraordinary General Meeting to issue shares (having disapplied pre-emption
rights) for the purposes of the Offer and other general purposes and make market
purchases of shares.

The issue of New IHT AIM VCT Shares pursuant to the Scheme and the Offer will
result in the creation of further share premium. The IHT AIM VCT board considers
it appropriate to obtain approval of shareholders at the IHT AIM VCT
Extraordinary General Meeting to cancel the share premium account and the
capital redemption reserve to create (subject to court sanction) further
distributable reserves to fund distributions to Shareholders and buy-backs, to
set off or write off losses and for other corporate purposes.

EXPECTED TIMETABLE

The Scheme

IHT AIM VCT Extraordinary General Meeting           11.30 am 4 August 2010

Second AIM VCT First General Meeting                12.00 pm 4 August 2010

Effective date of the IHT AIM VCT Share             4 August
Redesignation

Second AIM VCT register of members closed           11 August 2010

Calculation date for the Scheme                     after 5.00 pm 11 August 2010

Suspension of listing of Second AIM VCT Shares      after 7.30 am 12 August 2010

Second AIM VCT Second General Meeting               12.00 pm 12 August 2010

Effective Date for the transfer of assets and       12 August 2010
liabilities of Second AIM VCT to IHT AIM VCT and
issue of New IHT AIM VCT Shares

Announcement of results of the meetings and         12 August 2010
completion of the Scheme (if applicable)

Cancellation of the Second AIM VCT share listing    after 8.00 am 13 March 2010

Admission of and dealings in the New IHT AIM VCT    13 August 2010
Shares issued pursuant to the Scheme to commence

Certificates for New IHT AIM VCT Shares (arising    25 August 2010
from the IHT AIM VCT Share Redesignation or issued
pursuant to the Scheme) dispatched

The Offer

Offer opens                                 9 July 2010

Allotment of New IHT AIM VCT Shares         Monthly

Admission of and dealings in New IHT AIM    3 business days following allotment
VCT Shares issued pursuant to the Offer to
commence

Certificates for New IHT AIM VCT Shares     within 14 business days of allotment
pursuant to the Offer dispatched

Offer closes*                               30 April 2011

*The Offer will close earlier than the date stated above if it is fully
subscribed. The IHT AIM VCT directors reserve the right to close the Offer
earlier or to extend the Offer and to accept applications and issue New IHT AIM
VCT Shares at any time prior to or after the closing date.

DOCUMENTS AND APPROVALS

IHT AIM VCT shareholders will receive a copy of a circular convening the IHT AIM
VCT Extraordinary General Meeting to be held on 4 August 2010 (together with the
IHT AIM VCT prospectus) at which IHT AIM VCT shareholders will be invited to
approve resolutions in connection with the Proposals.

Second AIM VCT shareholders will receive a circular convening the Second AIM VCT
First General Meeting on 4 August 2010 and the Second AIM VCT Second General
Meeting on 12 August 2010 (together with the IHT AIM VCT prospectus) at which
Second AIM VCT shareholders will be invited to approve resolutions in connection
with the Scheme.

Copies of the IHT AIM VCT prospectus and the circular for IHT AIM VCT and Second
AIM VCT have been submitted to the UK Listing Authority and will be shortly
available for inspection at the UK Listing Authority's Document Viewing Facility
which is situated at:

Financial Services Authority
25 The North Colonnade
Canary Wharf
London E14 5HS
Telephone: [phone]

Investment Manager and Administrator for IHT AIM VCT and Second AIM VCT
Octopus Investments Limited
Andrew Buchanan or Kate Tidbury
Telephone: [phone]

Company Secretary for IHT AIM VCT and Second AIM VCT
Celia Whitten
Telephone: [phone]

Solicitors to IHT AIM VCT and Second AIM VCT
Martineau
Kavita Patel
Telephone: [phone]

Sponsor to IHT AIM VCT
Charles Stanley Securities
Ben Johnston/Mark Taylor
Telephone: [phone]

The directors and proposed directors of IHT AIM VCT accept responsibility for
the information relating to IHT AIM VCT, its directors and proposed directors
contained in this announcement.  To the best of the knowledge and belief of such
directors and proposed directors (who have taken all reasonable care to ensure
that such is the case), the information relating to IHT AIM VCT, its directors
and proposed directors contained in this announcement, for which they are solely
responsible, is in accordance with the facts and does not omit anything likely
to affect the import of such information.

The directors of Second AIM VCT accept responsibility for the information
relating to Second AIM VCT and its directors contained in this announcement. To
the best of the knowledge and belief of such directors (who have taken all
reasonable care to ensure that such is the case), the information relating to
Second AIM VCT and its directors contained in this document, for which they are
solely responsible, is in accordance with the facts and does not omit anything
likely to affect the import of such information.

Martineau are acting as legal advisers for IHT AIM VCT and Second AIM VCT and
for no one else in connection with the matters described herein and will not be
responsible to anyone other than IHT AIM VCT and Second AIM VCT for providing
the protections afforded to clients of Martineau or for providing advice in
relation to the matters described herein.

Charles Stanley Securities, a division of Charles Stanley & Co Limited, which is
authorised and regulated in the United Kingdom by the Financial Services
Authority, is acting as sponsor for IHT AIM VCT and no one else and will not be
responsible to any other person for providing the protections afforded to
customers of Charles Stanley Securities or for providing advice in relation to
any matters referred to herein.



[HUG#1430705]








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