A family investment company could offer a viable solution for family business owners to save on Income Tax and Inheritance Tax.
What is a family investment company?
A family investment company (FIC) is a private company controlled by its directors (usually the parents), with family members owning the shares. An FIC enables directors/parents to retain control over assets whilst accumulating wealth in a tax efficient manner and facilitating future succession planning.
What are the advantages?
FICs are a popular vehicle among business owners as the company structure is much more familiar than alternatives such as a trust. Usually, the FIC is managed in the same way as a business with a board of directors making all decisions. The flexibility of an FIC is also appealing, as the funds are loaned to the FIC and can be repaid if necessary. This is not the case where they are settled into a trust.
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Of course, every family is different and an FIC should not be a ‘one size fits all’ approach, or indeed the right answer for every family. However, with the right structure in place, an FIC is something that should be considered as part of a family wealth and succession planning strategy.
Get in touch with our private client tax team on 01788 539000 or 0116 261 0061 to find out more.
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