Family Investment Company
FAMILY INVESTMENT COMPANY (FIC)
A Family Investment Company (FIC) is a private company used by wealthy families to manage and invest their assets. In the UK, FICs are gaining popularity as a tax-efficient means of passing on wealth to future generations.
WHAT SETS FIC’S APART FROM OTHER INVESTMENTS?
Our in-house tax team has pinpointed several key features that set FICs apart from other investment vehicles:
Family Ownership and Control: Unlike external investors or shareholders, FICs are owned and controlled by the family. This allows the family to make decisions about how their assets are invested and managed, ensuring the wealth stays within the family.
Asset Flexibility: FICs can hold a diverse range of assets, including shares in other companies, property, and various other investments. This flexibility makes them an attractive option for families looking to diversify their wealth and mitigate potential risks.
KEY ADVANTAGES OF AN FIC
Utilising an FIC presents a significant opportunity to minimise the tax burden on wealth passed down to future generations. In the UK, inheritance tax applies to estates exceeding a specific threshold (currently £325,000). Through an FIC, families can strategically organise asset ownership and distribution to lessen the tax liability.
It’s imperative to carefully consider the structural and governance aspects when establishing and operating an FIC. Properly aligning the company’s structure and governance with the family’s long-term objectives and risk tolerance is crucial for success.
IN CONCLUSION
A Family Investment Company offers unparalleled advantages for managing and growing family wealth in the UK, including flexibility, control, and potential tax efficiency. However, it’s essential to seek professional guidance to ensure the company is established and operated in a manner that aligns with the family’s requirements and complies with relevant laws and regulations.
