Family Investment Companies

Family Investment Companies (FICs) are private limited companies set up to hold family assets. They are becoming an increasingly popular part of wealth structuring and can provide an efficient alternative to traditional planning options.

Some of the benefits of FICs include:

Tax-efficient – as companies they are taxed differently to individuals and trusts
More control – over how assets are distributed among family members and what happens in cases such as divorce
Flexible about types of assets they can hold – for example, most types of real estate and also liquid investments, including assets held outside the UK

FICs are often attractive to business owners and entrepreneurs who are already familiar with company structures. They can be useful for any family with wealth to invest, however, and are increasingly being used as a way to protect, give away, and grow assets in a structured way.

Our solicitors can advise on whether an FIC is right for you and your family’s wealth. We’ll work with you to create a structure that is tailored to your needs and protects your assets against future risks or changes in the family.

Our multi-disciplinary team is highly specialised and experienced. We’re experts not just in tax and wealth planning, but also in corporate law, which is vital for making FICs work effectively. Our real estate team can deal with any property transactions.

Call us today on 0370 1500 100 – or use our online form and we’ll call you back.

Experienced in representing international and high-net worth clients

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More Information - Family Investment Companies

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Frequently Asked Questions

Does Inheritance Tax Apply to FICs?

FICs can avoid inheritance tax provided certain conditions are fulfilled:

When you set up the company, subscriptions for shares must be paid in cash
You give the shareholders their shares at least seven years before you die.

The gift of shares is subject to the seven-year rule for inheritance tax purposes.

If you (as the founder) keep a minority interest in the company, the value of your shares will be taken into account on your death and potentially incur inheritance tax. However, the value of these shares can often be presented as negligible, since you can’t sell them and you’re not entitled to profits from the company.

Call us for more information on 0370 1500 100 – or use our online form.

What Happens If Someone Dies Or Divorces?

Because FICs are companies, this means there’s greater control in how the wealth is protected.

If you’re concerned about wealth passing out of the family, we can include terms in the company documents that restrict the onward transfer of shares. This means the shares may not be part of any divorce settlement, or subject to any financial claim against a shareholder’s estate in years to come.

We can also help you draft terms for what would happen to shares if you or a shareholder died.

If used effectively, FICs can offer a highly tailored level of control to suit you and your family not only now, but also in the future.

Call us today on 0370 1500 100 for more information – or use our online form and we’ll call you back.

What Taxes Are Trusts Subject To That FICs Aren’t?

The taxation of trusts has changed significantly in the last 12 years and this means FICs are becoming increasingly popular part of wealth structuring and estate planning.

Some of the taxes a trust may be subject to include:

The ‘Relevant property regime’ – this includes a 20% inheritance tax charge on any property transfers over £325,000 for new trusts
Inheritance tax charged every ten years
“Exit charges” – when capital leaves a trust.

Call us today on 0370 1500 100 for more information – or use our online form and we’ll call you back.

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