Family Investment Companies
A Family Investment Company (FIC) is a bespoke private limited company designed to hold, grow, and transfer family wealth in a tax-efficient manner. It provides founders with ongoing control over the assets while enabling wealth to pass to the next generation outside of the IHT estate, potentially saving substantial amounts of Inheritance Tax.
What are the benefits?
Inheritance Tax Mitigation
Assets transferred to a FIC at market value begin to fall outside the founder's estate after seven years, reducing the IHT liability on death. Shares held by children or trusts for grandchildren accumulate in value outside the taxable estate.
Retained Control
Unlike gifts or trusts, a FIC allows founders to retain control through different share classes — holding voting shares while transferring economic value (growth shares) to family members. Founders can maintain oversight over the family wealth and investment decisions.
Tax-Efficient Growth
Investment returns within a FIC are subject to Corporation Tax rather than personal Income Tax rates, allowing wealth to compound more efficiently. Dividends between UK companies are typically exempt from Corporation Tax entirely.
Flexible Income Distribution
FICs allow income to be distributed to family members holding dividend shares, enabling use of lower-rate taxpayers' personal allowances and basic rate bands, reducing the overall family tax burden.
How can Zenus Tax help?
We design the FIC structure, including the appropriate share classes for founders and family members
We advise on how to fund the FIC in a tax-efficient manner (loan, gift, or transfer of assets)
We coordinate with solicitors to prepare the bespoke Articles of Association and shareholder agreements
We advise on the ongoing tax compliance of the FIC, including investment income, dividends, and capital gains
Frequently Asked Questions
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