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Family Investment Company

A family investment company (FIC) is a private limited company that is established to manage and hold family wealth.

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It’s normal for individuals to seek to build wealth during their lifetime with a view to providing for themselves and ultimately those they leave behind. The difficulty with this is when there is a desire to pay as little inheritance tax as legally possible and you can identify surplus in your estate.

Retaining assets in excess of your future needs is not good estate planning if you have an estate that’s liable to inheritance tax; it will result in paying tax on those assets at 40%.

It’s important to consider gifting at this stage but that is not without its complications. Firstly, gifts are considered disposals for capital gains tax and so for assets that have been held for a long time, a gift can be a costly process and can end up being prohibitive. You also have to be mindful that the value of a gifted asset generally takes seven years to fall out of your inheritance tax calculations and this may not be realistic if it has taken you a long time to acknowledge the assets as being surplus.

What is a Family Investment Company?

A Family Investment Company (FIC) is a private limited company that is established to manage and hold family wealth. It’s an arrangement that enables families to hold the value of a range of assets through a company structure (shareholding). Shares in the FIC can vary in nature from person to person allowing them to be tailored to each individual’s needs, for example certain shares can have voting rights while others don’t, some can produce dividends whilst others are restricted to capital and some can have all three. Shares can be issued and distributed without needing to alter the underlying assets. They can be issued to individuals or to trusts if there is a desire to keep wealth outside of an individual’s estate. It allows families to pool their assets and invest them collectively, with the goal of preserving wealth and passing it down to future generations.

The FIC is owned by family members who become shareholders in the company. The most suitable family members tend to be directors who will manage the assets on a day to day basis. The FIC can invest in a variety of assets including property, shares and other investments.

What are the benefits of a FIC?

A FIC provides a tax-efficient way for families to manage their wealth over a long period of time. The FIC is subject to corporation tax on its profits, which is currently at a lower rate than income tax. The shareholders of the FIC can receive dividends from the company, which are subject to dividend tax rates, also lower than income tax rates.

The issuing of new shares and being able to choose the benefits or rights which are to be attached to each share can make the gifting process a lot easier. For example, if a parent was looking to make a gift to their adult child but they had concerns as to how the asset would be subsequently managed, they would have the ability through a FIC to issue to the child shares without voting rights. As the director, the parent would retain control of the asset on a day to day basis. In this manner, the FIC has similar benefits to a discretionary trust but without the restriction over the value that can enter the arrangement free of tax. 

Another benefit of a FIC is that it can provide a structure for family members to work together to manage their wealth, providing a platform for family members to collaborate on investment decisions and to share knowledge and expertise. 

To whom are they best suited?

FICs are typically suited to individuals who are likely to have taxable estates. They are particularly efficient arrangements for those looking to build a property portfolio.

How do I set up a Family Investment Company?

Setting up a FIC is complex; the structure must be set up correctly and the company’s activities must be managed in compliance with relevant laws and regulations, so it’s essential to get specialist legal advice. Please get in touch with our team of expert Wealth Protection lawyers by telephoning 03333 058375 or email WealthProtection@psg-law.co.uk

Meet the Team

  • Laura Bywater

    Partner, Head of Wealth Protection

    Laura Bywater

    t:07939 121341

    e: laura.bywater@psg-law.co.uk

  • Gareth Williams

    Partner, Court of Protection & Wealth Protection

    Gareth Williams

    t:07497 839796

    e: gareth.williams@psg-law.co.uk

  • Gail Galloway

    Senior Associate, Wealth Protection

    Gail Galloway

    t:07399 781788

    e: gail.galloway@psg-law.co.uk

  • Marie Fletcher

    Legal Assistant, Wealth Protection

    Marie Fletcher

    t:07399 803662

    e: marie.fletcher@psg-law.co.uk

  • Lydia Palmer

    Legal Assistant, Wealth Protection

    Lydia Palmer

    t:07399 565976

    e: lydia.palmer@psg-law.co.uk

What Our Clients Say About Us...

  • “Gail has been very professional, polite and quick to respond throughout the transaction. Would happily recommend.” Mick Jennings


  • “Top class solicitors, provided a hassle free, professional service… if you’re looking for a firm that really seems to care, charges reasonable fees and doesn’t swallow you up in legal jargon - I’d highly recommend giving them a call.” Anne-Marie Armstrong


  • “The whole team has been accessible and very well informed.” Legal 500


  • “I have received a very caring and professional service from both Laura and Gail. All my concerns were answered in a considerate and prompt fashion. Thank you very much.” Justine Abrahams


  • “Gail is my solicitor and has helped me in every stage of my husband’s estate. Because I can no longer write she has simplified things for me and is very approachable whenever I ring, and doesn’t make me feel stupid when I ask stupid questions!” Margaret Borthwick


  • "Very personable and friendly, technically very strong and very ethical and client focused." Legal 500


  • "Gareth Williams, can give advice to HNW individuals with complex planning needs and also acts as a professional deputy for individuals who have been awarded significant personal injury and medical negligence claims, technically very strong and has a great understanding of the needs of the client and how to provide the appropriate solutions and service." Legal 500


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