FICS: What Are Family Investment Companies and Why Are They Important?
What Are Family Investment Companies and Why Are They Important?
In recent years Family Investment Company’s (FIC) have become increasingly popular with tax advisers and clients. Designed to hold and manage family wealth in a tax-efficient and controlled manner, FICs are increasingly being used as part of long-term estate planning.
What Is a Family Investment Company?
A Family Investment Company is a private limited company established to hold and manage investments on behalf of and for the benefit of family members.
Rather than owning investment assets personally, individuals transfer capital and/or assets into the company (the shares of which are usually held by various family members), for investment purposes.
As with traditional companies, the benefit of any future growth of the company, its assets and investments are shared among the company’s members. However, unlike traditional investment companies, a Family Investment Company is usually created with specific family protections included within its articles in an effort to ensure:
- the benefit of the company’s assets and investments are kept within the family and/or trusts for the benefit of family members only’ and
- the assets and capital of the FIC are capable of distribution in a tax efficient manner.
Why Are Family Investment Companies Important?
- Succession Planning
Family Investment Companies are often considered with the intention of helping families transfer wealth across generations in a structured and tax efficient way.
- Control Over Family Assets
While Estate planning can sometimes involve giving away assets and relinquishing control, a Family Investment Company can be more attractive by allowing investors to retain some control over the day to day running of the Company following a distribution of assets or capital into the FIC.
- Tax Efficiency
Family Investment Companies may offer tax advantages.
However, professional tax, legal, and/or financial advice (as applicable) is essential, to understand whether a FIC is an appropriate tool for you and your individual circumstances.
- Implementation
At Enoch Evans Solicitors, we have experts across our Corporate and Private Client Teams who are experienced at establishing FICs and implementing other mechanisms on behalf of clients. We work collaboratively with client’s tax and financial advisers to advise on and implement various estate planning strategies including the creation of Family Investment Companies.
Our Corporate and Private Client teams have a strong reputation and a proven track record of success in providing legal support for families and high net worth individuals across various sectors, reflected in their rankings in the legal 500 directory. If you need any further support, please contact:
Sukie Shemar 01922 728115
Andrew Martin 01922 728101
Lucy Wheaver 01922 687712
[Disclaimer] The contents of this blog is not legal or tax advice. You should always take professional advice before proceeding with any steps in respect of your legal or tax affairs.