Family Investment Companies

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

Jill Walker

Private Client Partner

Contact Jill Meet the team

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

Meet our team

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.
Joanna Robertson
I wouldn’t hesitate in recommending AAB to anyone else who, like us, may be struggling to get the expert advice required, especially when it involves coming back to the UK and managing tax aspects on overseas income and assets.
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.

Needing help with family investment companies? Speak to us

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