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FIC Experts London

Setting Up Family Investment Company - FIC Experts in London

What Is a Family Investment Company (FIC)?

A Family Investment Company is a private company, usually a private limited company, set up to hold and grow family wealth typically cash, investment assets, non-cash assets, or property for the benefit of future generations. The main family investment company functions include asset management, wealth transfer, and tax planning.

Instead of gifting assets outright, you can:

  • Transfer capital, investment assets, and non-cash assets into the company (transferring assets may have tax implications)
  • Retain control through voting shares and directorships
  • Maintain control by using a shareholders agreement and different share classes
  • Allow children or other family members to share in future growth through non-voting or restricted shares

 

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    Used correctly, an FIC can:

    • Reduce exposure to Inheritance Tax (IHT) on future growth in value
    • Create a clear governance structure for managing family wealth
    • Offer flexibility in how and when family members benefit from income or capital
    • Maintain control over company operations and distributions through a shareholders agreement and share structure

    Important: FICs are not “one size fits all” or a magic IHT-free structure. They must be designed carefully to align with UK tax rules and your personal circumstances.

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    Why Families in London Choose an FIC

    London families often have complex financial profiles multiple properties, business sales, international assets or significant investment portfolios. An FIC can help you support succession planning and inheritance tax planning for complex family structures. An FIC can help you:

    • Move surplus cash out of your personal estate
    • Consolidate investments in a company structure
    • Involve the next generation in wealth stewardship
    • Ring-fence family assets from personal risks (e.g. trading businesses)
    • Incorporate a trading company within the FIC structure for additional tax planning opportunities

    When structured alongside wills, trusts and life assurance, an FIC becomes a central building block of a long-term estate and succession plan.

    When evaluating the suitability of an FIC, it is important to consider annual profits and ongoing costs.

    How an FIC Can Help with Inheritance Tax

    UK Inheritance Tax is normally charged at 40% on the value of your estate above the available nil-rate bands and reliefs. Using a Family Investment Company (FIC) for inheritance tax purposes can be an effective strategy for managing inheritance tax liabilities and optimizing your estate planning.

    A Family Investment Company can help manage IHT exposure by:

    • Freezing the value of your estate: You can subscribe for voting shares (with control rights) while gifting or assigning non-voting “growth” shares to children or a family trust. Future growth in value mainly accrues to the non-voting shareholders – outside your estate.
    • Using potentially exempt transfers (PETs): Gifts of shares to individuals are usually potentially exempt transfers for inheritance tax purposes. If you survive seven years, the value gifted is typically outside your estate for IHT purposes (subject to anti-avoidance rules).
    • Facilitating gradual wealth transfer: Rather than gifting large sums in one go, you can transfer value over time via shares or dividends. This approach allows you to manage the tax implications and tax consequences of transferring assets gradually.
    • Co-ordinating with trusts: FIC shares can be held by family trusts, allowing you to combine the company structure with trust-based control and protection where appropriate. This can help manage overall tax liabilities and inheritance tax liabilities.

    When transferring assets, including property, into the FIC, you should consider the potential for capital gains and capital gains tax, as such transfers may trigger tax consequences. Increases in property value can also impact your overall tax liabilities and inheritance tax planning.

    Tax warning: The effectiveness of an FIC for IHT depends on many factors existing estate size, how the company is funded, how shares are structured, your residence and domicile status, and other planning already in place. Immediate tax consequences, such as capital gains tax or stamp duty, may arise from asset transfers. Professional advice is essential.

     

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    Our FIC Services in London

    We offer an end to end service for families considering or implementing an FIC:

    • Advice on structuring the Family Investment Company, including share classes and control mechanisms
    • Drafting and maintaining a shareholders agreement to formalize shareholder rights and control
    • Tax & Accounting Support, including:
      • Preparation and filing of annual accounts
      • Preparing and filing corporation tax returns and advising on the obligation to pay corporation tax on profits
      • Reviewing the tax treatment of different types of income, and seeking tax relief and tax savings where possible
    • Ongoing compliance and governance support
    • Succession and estate planning advice

    1. Initial Consultation & Feasibility Review

    • Understand your family structure, assets and objectives
    • Compare an FIC with trusts, outright gifting and other planning routes
    • Identify potential tax issues (IHT, income tax, corporation tax, CGT, SDLT), and assess the tax implications and tax advantages of an FIC, including how these may affect wealth preservation and accumulation
    • Consider the risk of double taxation and understand the combined tax rate when evaluating the FIC structure, as profits may be taxed at both the corporate and shareholder level
    • Outline whether an FIC is likely to be appropriate for you

    2. Design & Structuring

    We design the FIC around your goals, including:

    • Share classes (voting, non-voting, growth, preference shares), with the option to use alphabet shares to maintain control
    • Rights over dividends, capital and control
    • How the company will be funded (cash injection, loan funding, interest free loans, assets in specie)
    • The role of directors, shareholders and potential family trustees
    • Governance documents, such as a family charter or shareholder agreement
    • The potential to claim tax relief on loan interest deductions when loans are used for investment or business purposes

    3. Incorporation & Legal Documentation

    We take care of the practical steps:

    • Company formation with Companies House as a private company
    • Drafting tailored Articles of Association
    • Drawing up shareholder agreements and loan agreements
    • Liaising with your existing advisers (solicitor, accountant, investment manager)

    4. Tax & Accounting Support

    Ongoing support can include:

    • Corporation tax registration and filings, including understanding applicable corporation tax rates and annual tax obligations such as the Annual Tax on Enveloped Dwellings (ATED)
    • Ensuring profit extraction and dividends are tax-efficient, with consideration of the tax treatment of dividend payments, dividends received, dividend tax, dividend income, and dividends paid to different types of shareholders
    • Reviewing directors’ remuneration and loan accounts
    • Reviewing taxable income and the tax implications of different income streams, including rental income and the availability of mortgage interest deductions at the corporate level
    • Claiming a corporation tax deduction for loan interest where applicable, to maximize tax relief on business-related borrowings
    • Coordinating with your personal tax planning and compliance

    5. Ongoing Review & Next-Generation Planning

    As your family’s needs evolve, we:

    • Review the FIC structure in light of changes to tax law and HMRC practice
    • Advise on bringing in new family members as shareholders or directors, including involving younger generations in a tax efficient manner
    • Help with succession events, exits and distributions of value
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    Typical Steps to Set Up a Family Investment Company

    1. Discovery Meeting: We discuss your objectives (asset protection, IHT, control, family involvement).
    2. Planning & Advice: We prepare a bespoke FIC plan, including tax and structuring recommendations.
    3. Company Formation & Documentation: The FIC is incorporated, and fully bespoke Articles and legal documents are completed.
    4. Funding the FIC: You transfer cash, investment assets, or non-cash assets (or make loans) to the company in a tax-managed way. When transferring assets, especially non-cash assets such as property or shares, it is important to consider the potential tax consequences and immediate tax consequences, including Capital Gains Tax (CGT) and Stamp Duty Land Tax (SDLT). Proper structuring can help mitigate these tax liabilities.
    5. Implementation of Investment Strategy: The FIC begins investing according to your agreed risk profile and goals.
    6. Regular Reviews: We review performance, distributions and tax position, adjusting the structure where needed.

    Is an FIC Right for You?

    An FIC may be suitable if you:

    • Have (or will have) significant surplus capital
    • Want to reduce future IHT, but do not wish to lose all control
    • Are comfortable with a company structure and corporate governance
    • Want to educate and involve the next generation in managing family wealth
    • Want to protect investment assets from personal liabilities, helping to shield family wealth from creditors

    An FIC may not be right or may need careful modification if you:

    • Require full access to capital personally
    • Have only modest surplus assets
    • Have complex international domicile or residence issues
    • Hold assets which are better suited to other reliefs (e.g. Business Relief)
    • Are considering investments that may benefit more from the enterprise investment scheme (EIS), as EIS tax incentives and reliefs are often more advantageous when investing personally rather than through a company

    We’ll help you weigh the pros and cons honestly before taking any step.

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    Why Work with Our FIC Experts in London?

    • Specialist expertise in UK Family Investment Companies and private client tax
    • London-based team, familiar with entrepreneurial, multi-asset and international families
    • Integrated approach with your existing accountant, solicitor and wealth manager
    • Clear, transparent fees agreed in advance
    • Ongoing support, not just a one-off setup

    Speak to Our FIC Experts in London

    If you’re considering a Family Investment Company to reduce Inheritance Tax and structure your family wealth, our London team can guide you through every stage.

    📞 Call us: 03300 575 902

    Or complete our short enquiry form and one of our FIC specialists will get in touch to arrange a confidential, no-obligation discussion.

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    Book Free Consultation With FIC Experts London

    You don’t have to figure all this out on your own.

    If you’re worried about Inheritance Tax, or simply want to make sure your loved ones are properly protected, we’re here to help.

    Specialist FIC Experts London ensure your loved ones inherit what you intend without unnecessary tax or complications.

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    why you should consult our London based FIC experts?

    1
    Protect your family
    Set up your Family Investment Company in London and take control of long-term wealth planning with expert guidance.
    2
    London FIC specialists
    Our London FIC specialists help you structure family assets tax-efficiently while retaining full control.
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    3
    Reduce future Inheritance Tax
    Reduce future Inheritance Tax and grow family wealth through a professionally designed Family Investment Company.
    4
    Modern alternative to trusts
    Create a flexible, modern alternative to trusts with a bespoke FIC tailored to your family’s goals.
    5
    London based FIC experts

    London-based FIC experts guiding you from setup to strategy for smarter, multi-generational wealth planning.

    FAQ

    Can an FIC eliminate Inheritance Tax completely?

    No structure can guarantee the complete elimination of IHT. An FIC can, however, play a major role in reducing future IHT exposure by moving growth in value outside your estate, provided the plan is implemented correctly and kept under review.

    Not necessarily. Your control depends on how shares and directorships are structured. Many founders retain voting control and director roles while passing economic growth to family members. In some cases, it is possible to make tax-free withdrawals or distributions, such as loan repayments or using available allowances, depending on how the FIC is structured.

    The company itself can be incorporated quickly, but proper planning, documentation and funding typically take longer. The important part is getting the structure right, not just forming a company.

    Neither is “better” in all cases. Trusts may be more suitable for certain situations; FICs offer different advantages (corporate governance, flexibility, familiarity). Often, families use a combination of both. The tax treatment of FICs and trusts differs: FICs are taxed at the corporate and shareholder level, while trusts are taxed at the trust and beneficiary level, which can impact overall tax efficiency and planning.

    Yes, FICs can be subject to double taxation. This means that profits are first taxed at the corporate level, and then again when distributed to shareholders as dividends. Additionally, there may be further tax implications when transferring assets into the company. Understanding the double taxation aspect is important when considering the overall tax efficiency of an FIC.