Family Investment Companies
For families looking to preserve and manage long-term wealth, Family Investment Companies (FICs) offer a practical structure that allows control, flexibility, and tax-efficient investments. Whether your aim is to grow a family portfolio or plan for succession, a FIC can support both financial goals and intergenerational planning.
FICs are private limited companies where family members hold shares, and assets are managed within the company rather than held personally. Common assets include property, listed shares, bonds, and private investments.
How Family Investment Companies Work
A FIC allows wealth to be retained and reinvested within a company environment. Parents or senior family members typically act as directors and retain decision-making control, while children or beneficiaries hold shares, often through different classes.
Ownership and control can be kept separate, allowing for structured succession without an immediate transfer of wealth. Income is subject to corporation tax rather than personal income tax, which can offer significant benefits.
This structure allows families to:
- Reduce exposure to higher rates of income tax and capital gains
- Retain control over distributions to younger generations
- Accumulate wealth within the company more efficiently than personal holding structures
Apply shareholder agreements and restrictions tailored to family goals
FIC Tax Structure and UK Tax Planning
A well-managed FIC tax structure can play an important role in UK tax planning, especially when compared to personal or trust-based alternatives.
Corporation tax is typically lower than the highest rates of personal income tax, meaning retained profits can be reinvested more efficiently. Dividends received by the FIC from UK companies are often exempt from further tax, which makes them particularly attractive as holding vehicles.
We provide advice on:
- Structuring capital contributions (gifts vs. loans)
- Share classes and voting rights
- Dividend distribution planning
- Tax compliance and reporting
- Interaction with other assets and trusts
Our support also extends to shareholder agreements, restrictions on share transfers, and succession modelling within a corporate framework.
Inheritance Tax Planning and Wealth Structuring
A major reason families consider a FIC is its potential role in inheritance tax planning in the UK. By gifting shares early, parents can pass on value to their children while still maintaining control. If structured correctly, future growth in the company may fall outside the parents’ estate for inheritance tax purposes.
While FICs do not qualify for business property relief like some trading companies, their benefits come from planning over time. Our team can help align the FIC’s structure with your wider UK wealth structuring strategy.
We look at:
- Lifetime gifting and share planning
- Share dilution strategies
- Control and access restrictions
- IHT modelling for long-term impact
Who Should Consider a FIC?
Family investment companies are most suitable for individuals or families with assets exceeding £1m, particularly where there is a desire to plan for the next generation while retaining oversight.
This includes:
- Business owners seeking a tax-efficient way to invest post-sale proceeds
- Property investors looking to reduce exposure to personal taxes
- Families concerned with generational succession
- Those seeking alternatives to discretionary trusts
We advise each client on the viability of a FIC and how it fits into their long-term family wealth planning.
Why Work With Us
Our team advises on the full lifecycle of FICs—from company formation to ongoing reporting and tax planning. We work closely with legal and investment professionals to support each aspect of the structure, offering a joined-up approach to family wealth preservation.
Our service includes:
- FIC set-up and HMRC registration
- Shareholder agreements and structure
- Ongoing accounting and compliance
- Strategic UK tax planning
- Guidance on inheritance tax planning UK
- Bespoke modelling for tax-efficient investments
Speak to a Family Investment Company Adviser
If you’re exploring ways to structure family wealth, protect future generations, or reduce long-term tax exposure, a Family Investment Company may be an effective solution. We can help you assess whether this approach aligns with your objectives and guide you through every step.
