Family Investment Companies

In recent years the Family Investment Company has become popular, either alongside or as an alternative to family trusts.

Jill

Jill Walker

Private Client Partner

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Who we can help

  • HIGH NET WORTH INDIVIDUALS
  • INTERNATIONAL PRIVATE CLIENTS
  • TRUSTEES
  • BENEFICIARIES

How we can help

  • PERSONAL TAX
  • TAX COMPLIANCE
  • TAX PLANNING
  • CHARITABLE GIVING
  • SCOTTISH TAXPAYERS
  • INTERNATIONAL PRIVATE CLIENT TAX
  • TAX RESIDENCE AND DOMICILE
  • PARTNERSHIPS

HELPING YOU DO WHAT'S BEST FOR YOUR FAMILY

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A Family Investment Company (FIC) still offers much of the control and flexibility provided by a Trust, but with greater tax efficiency from which the founder (the person putting the funds into the company) can also benefit. We can discuss the pros and cons of each approach and advise you on whichever route you choose. 

WHAT IS A FAMILY INVESTMENT COMPANY?

A Family Investment Company is, as the name suggests, a private limited company. The company will frequently be initiated by a loan from the founder (who would be the Settlor if this was a Trust.) The shareholders are usually family members – the equivalent of the trustees in a Trust. 

The shares can be split into separate classes to provide different levels of control, income (from the dividends) and capital repayment. This gives similar flexibility to a Trust, but where a FIC has a further advantage is that, unlike the settlor in a Trust, the company founder can still benefit from the assets 

As a company it must have articles of association and submit accounts and confirmation statements to Companies House annually. FICs pay corporation tax, which is at a lower rather than the higher rate income tax and capital gains tax generally paid by Trusts.  

Although a FIC is more tax-efficient, it requires more input from solicitors and accountants, so you’ll need to be mindful of the set-up and operating costs. 

  • AAB's private client tax team deliver clear advice in understandable terms so we can appreciate how effective planning can lead to benefits for the whole family. They have taken away the worry and doubt for us.

    Alex Wiseman

  • "I have been very much looked after by the Private Client team for a number of years now. Managed by experienced individuals, they are able to provide that sometimes elusive, bespoke, one to one professional advice.

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    John Bannerman

  • The efforts of the team ensured that timely planning could be undertaken to the overall benefit of my family. AAB clearly demonstrated their expertise here and proved why it is always worth getting the best professionals on the job!

    Keith Fletcher

MAKING A FAMILY INVESTMENT COMPANY WORK FOR YOU

FICs are, for many, now the preferred choice for tax planning and assets protection. Many of our clients are drawn to FICs as a means of passing on family wealth whilst retaining an element of control and taking advantage of favourable Corporation Tax rates. 

Our team of tax specialists regularly advise on: 

  • The structuring and financing of FICs. 
  • Tax efficient distributions from the FIC and managing the timing of profit extraction to take advantage of lower Income Tax bands and allowances. 
  • The Inheritance Tax benefits of using a FIC structure and the potential interaction with Trust tax planning. 
  • All associated tax compliance from initial set up to annual reporting obligations. 

We will work alongside you and your family to ensure your FIC protects the interests of all shareholders and meets your longer-term succession planning objectives. 

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