A Family Investment Company can help families hold investments, plan for succession and pass value to the next generation while retaining appropriate control over income, assets and decision-making.
What is a Family Investment Company?
A Family Investment Company, or FIC, is a private company used to hold investments such as stocks, shares, cash and property portfolios. It is typically used by individuals and families who want to grow, manage and transfer wealth in a structured way.
Why families consider a FIC
A FIC can provide flexibility where family members want to pass wealth down the generations, manage inheritance tax exposure, introduce younger family members and retain a measure of control over investment assets.
Key issues to consider
The tax and practical position depends on the asset base, family dynamics, shareholder rights, loans, income requirements, company administration and the interaction between corporation tax, income tax, capital gains tax and inheritance tax.
Key characteristics and reasons for using a FIC include:
- Passing value to children or wider family members in a controlled way.
- Retaining voting control or income rights while future growth accrues elsewhere.
- Holding investment portfolios or property assets inside a company structure.
- Considering share classes, shareholder agreements and governance protections.
- Reviewing ongoing tax compliance, accounts, Companies House filings and HMRC reporting.
How can Stratos help you?
Stratos can provide practical, technically robust support tailored to the facts, the tax position and the commercial or family objectives behind the planning.
We can provide assistance with the following key issues:
- Designing the FIC share structure and rights.
- Reviewing whether cash, investments or property should be introduced to the company from a tax perspective.
- Advising on inheritance tax, capital gains tax, corporation tax and income tax implications.
- Coordinating with lawyers on shareholder agreements and family governance documents.
- Providing ongoing support on compliance, distributions and future changes.
Arrange a Family Investment Company Planning Review
Speak to Stratos before setting up or restructuring a Family Investment Company so the tax, governance and family objectives are aligned from the start.
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Case Study
Structuring Property Investments to Minimise Inheritance Tax Liability
The Challenge
Mr and Mrs Jones owned 50% each of the equity in a company that already owned a material amount of investment property. Inheritance Tax in relation to their shares in the company became an issue (with an estimated liability of £2m) so they asked Stratos how to plan around their holding.
The Solution
As the company already had material positive value in its equity the shares couldn’t be passed by Mum and Dad to their children without incurring Capital Gains Tax. Therefore, they adopted our advice which was to ‘Freeze’ their own equity in the company and give ‘Growth’ shares to the children.
The Value
This allows any future increases in the equity to accrue in the children’s estates, rather than theirs.
FAQs
FICs are usually most useful where there is a meaningful investment portfolio or property wealth to manage. Running costs and administration mean they should be considered carefully before implementation.
Often, yes. A carefully designed share structure can allow senior family members to retain voting rights or income rights while future growth is directed to younger generations.
A FIC can form part of inheritance tax planning, but it must be structured carefully and reviewed alongside wider estate, capital gains tax and income needs.
Potentially, but property introduces additional tax issues including SDLT, ATED, financing, rental income, capital gains and future extraction of value.
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Related Services
Family Investment Companies
Inheritance Tax Planning
Property Tax
Capital Gains Tax
Valuations
Tax Returns
