Family Investment Companies (FICs) are private limited companies that have become increasingly popular for managing family wealth and assets. They offer a number of tax advantages over trusts, and are also popular with international clients from jurisdictions that do not recognise trusts.
Here are some potential benefits associated with Family Investment Companies:
- Asset Protection: FICs provide a high level of asset protection. By transferring assets to the company, they become separate from the individual family members’ personal estates. This can help protect family wealth from personal liabilities, potential creditors, or legal disputes.
- Tax Efficiency: One of the primary reasons for setting up an FIC is to optimize tax planning. FICs can be used to minimize inheritance tax (IHT) liabilities, as shares in the company can be passed down through generations without incurring IHT. They can help facilitate the orderly transfer of assets between generations and ensure that the family’s wealth is preserved and managed according to the family’s wishes.
- Control and Governance: Family members can retain control over the company and its assets while separating ownership from day-to-day management. This can be beneficial in cases where family members have different levels of involvement or expertise in managing assets.
- Investment Flexibility: FICs offer flexibility in managing a wide range of assets, including stocks, real estate, investments, and other holdings. This flexibility allows the family to adapt to changing investment strategies and opportunities.
- Confidentiality: The ownership and structure of an FIC can often be kept confidential, offering a degree of privacy for the family’s financial affairs.
Setting up and managing an FIC involves legal and tax considerations, and it is essential to seek professional advice from lawyers, accountants, and financial advisors with expertise in this area to ensure that it aligns with your family’s objectives and complies with applicable laws and regulations.
For further information on this topic or on any other legal area, please contact John Szepietowski or Kay Stewart at Audley Chaucer Solicitors on 01372 303444 or email admin@audleychaucer.com or visit our Linkedin page at https://www.linkedin.com/company/audley-chaucer-solicitors/.
Kieran Pezzack
This information was correct as of September 2023