The benefits of a Family Investment Company
By International Adviser, 30 Jul 18
People wanting to protect and maintain control of family wealth are increasingly turning to family investment companies. Ravi Francis, senior associate solicitor at Irwin Mitchell Private Wealth outlines the benefits and drawbacks of using such a structure.
Family investment companies (FICs) can be used to to transfer capital and income to the next generation in a tax efficient manner. They can be used in addition to, or in some cases as an alternative, to trusts.
One key difference between an FIC and a trust is that the FIC can be funded with a much larger value without incurring an immediate charge to inheritance tax (IHT).
The maximum that can generally be transferred to a trust without charge is £325,000 ($425,806, €365,207) per individual.
Through using different classes of shares, the FIC’s founder can ensure that control remains with them but capital and income can pass to other family members.