Family Investment Companies: Tax Aspects of Using FICs for Wealth Preservation

Introduction – FICs in Modern Estate Planning

• What is a Family Investment Company?

• Why FICs have become mainstream

• HMRC’s published stance and practical implications

• Common client motivations

• Typical misconceptions and unrealistic expectations

Structuring a Family Investment Company

• Key design principles

• Choice of corporate vehicle

• Structuring share capital: Income vs capital growth shares

• Voting and control rights

• Alphabet share structures in FICs

Balancing control for founders with economic participation for next generation

Drafting considerations and future-proofing

Funding the FIC

• Initial funding options: Cash subscription

• Loan funding

• Asset transfers

Loan vs equity funding:

• Tax and commercial considerations

• Control implications

Introducing existing investments

Use of directors’ loan accounts

Extracting value over time

Converting Existing Structures into a FIC

• Using existing companies as FICs

• Introducing FICs above trading companies

• Capital Gains Tax (CGT) and income tax considerations

• Stamp taxes and other transaction costs

• Managing historic shareholders and retained profits

Taxation and Anti-Avoidance Considerations

This section of the family investment company tax course explores:

• Corporation tax on investment income and gains

• Income tax considerations for shareholders

• Inheritance Tax (IHT) treatment and interaction with lifetime gifting

• Business Property Relief (BPR) – when it does and does not apply

• Anti-avoidance rules to watch: Settlements legislation

• Transactions in Securities

Interaction with Trusts and Wider Estate Planning

• Using trusts alongside FICs

• Trusts as shareholders

• Managing control and tax efficiency

• FICs vs trusts – comparative advantages and disadvantages

Governance, Control and Family Dynamics

• Directors’ duties in a family context

• Shareholder agreements

• Managing inter-generational control

• Dealing with family members and disputes

• Protecting founders while planning succession

Common Pitfalls and Practical Takeaways

• Over-engineering structures

• Failing to align legal form with family objectives

• Poor documentation and valuation

• Unrealistic IHT expectations

• Practical checklist for advisers

Training Objectives

This half-day FIC tax course will provide a clear, practical and up-to-date understanding of Family Investment Companies (FICs) for advisers. We explore how to structure them, how they are funded and how they are used in real-world estate planning.

The course recognises that FICs are now regarded by HMRC as “business as usual”, and so focuses not on theory, but on how to install FICs safely, manage tax and governance risks, and integrate them with broader succession and estate planning strategies. By the end of the course, delegates will be able to:

• Understand when a FIC is appropriate – and when it is not

• Structure share capital and funding in a way that aligns control, income and growth

• Convert existing assets or companies into a FIC

• Navigate key tax, anti-avoidance and compliance issues

• Confidently advise on the practical pros and cons of FICs compared with alternative structures

Training Course Summary

This half-day course on FIC taxes provides a practical, commercially focused guide to Family Investment Companies. We enable advisers to understand how FICs work in practice, how they fit into wider estate planning, and how to structure them safely and effectively.

Delegates will leave better equipped to help clients with confidence, manage risk, and identify when alternative planning may be more appropriate.