Personal Tax

Family investment companies

A Family Investment Company (FIC) can provide a tax efficient investment solution for family succession planning.

Setting up a FIC enables the owners to retain control over the assets while distributing wealth within the family in a tax efficient manner. 

There are a range of benefits of using a FIC for succession planning, including those below. It should be noted these benefits will depend on individual circumstances and qualifying conditions do apply. It is still worth considering the options available to you for passing wealth to the next generation while minimising yours (and their) potential future tax liabilities.

  • No inheritance tax to pay on the growth in value of the FIC as it will be outside the owners estate. 
  • No IHT on shares gifted to family members as long as the owner survives for 7 years and there is no immediate IHT charge on any funds the owner may loan to the company or invest in the company – note: these loans and funds do remain within the owners estate and will be subject to the normal IHT provisions.
  • Owner/founder has control over the FIC including the future investment decisions and the timing and amounts of the financial distributions to the family members. The company Memorandum and Articles of Association can be drafted to suit the specific requirements of founder and family members.
  • FICS are a good alternative to trusts as the tax liabilities can be less – it does depend on individual circumstances.

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Our Personal Tax Expert Wendy McBride

Wendy is a highly experienced tax accountant and an ATT Fellow working with corporate and private clients.

Wendy helps our clients to identify and access all the tax reliefs and allowances they’re entitled to access, as well as helping them to plan ahead to minimise potential future tax liabilities.