Keep control today. Pass on the growth.

A family investment company (FIC) is an ordinary private limited company set up to hold a family's investments, such as cash, shares, funds and sometimes property. The parents usually fund it mainly by lending money, and keep control through voting shares, while children or other family members hold shares that take the future growth. It is a planning structure, not a special legal form, and it is taxed as a company.

The parents form a company and put money in, usually as a loan with a small amount as share capital. The company invests the money. The articles create different classes of shares, so the parents can keep control while growth and dividends go to the children's shares. Profits are taxed in the company, and money comes back out as loan repayments, dividends or, for genuine work, salary. The detail is built around the family's own aims.

Mainly families with substantial funds they do not need to spend, who want future growth to build up outside the parents' estate while keeping control. Typical clients are business owners with surplus cash or sale proceeds, often in a holding company, property investors passing a portfolio on, and wealthy families planning for inheritance tax. Advisers also use it for clients in those positions. It is rarely worth the cost for smaller sums.

Usually by a loan from the parents, with a modest amount subscribed for shares. A loan can be repaid to the parents tax-free, so it keeps access to the capital, but it stays in their estate at face value. Funding by a gift of cash to the company is possible but has different inheritance tax consequences, so it is usually used for smaller amounts. The best mix depends on how much access to capital the parents want.

They are different classes of shares, often labelled A, B, C and D, each with its own rights. Typically the parents hold the A shares, which carry the votes. The B, C and D shares, held by children or other family members, have no votes but take the growth, and the directors can choose which class receives a dividend. This lets one company give different family members different treatment without separate structures.

It does not remove inheritance tax on the original money. Where the parents lend it, the loan stays in their estate. The saving is on the growth: investment returns build up in the company and belong mainly to the children's shares, so they are outside the parents' estate. Gifts of shares are generally potentially exempt transfers, free of tax if the donor survives seven years. A gift of cash to the company is generally a chargeable lifetime transfer instead.

Usually 25%. A family investment company holding shares, funds and cash is normally a close investment-holding company, which cannot use the 19% small profits rate or marginal relief. One that exists mainly to let property to unconnected tenants is not, so it can use the lower rates. Most dividends the company receives from UK and overseas companies are exempt. Interest, rent and chargeable gains are taxed.

There are three main routes. Loan repayments to the parents are tax-free, as it is their own capital coming back. Dividends to shareholders are taxed on the recipient at 10.75%, 35.75% or 39.35% for 2026/27, after the £500 dividend allowance. Salary is only for real work done for the company, and is rarely the main route. Taking money out in a tax-efficient order, with the loan first, is a central part of the planning.

A family investment company avoids the 20% lifetime inheritance tax entry charge that can apply to gifts into a discretionary trust above the nil-rate band, and the 10-year anniversary and exit charges under the relevant property regime. It also gives parents control through voting shares. A trust offers different flexibility, for example in who benefits and when, and can be simpler on gains. The right choice depends on the family's priorities.

Often yes for larger sums that are not needed for living costs, because a company pays 25% on interest and gains and most dividends are exempt, against up to 45% on interest, 39.35% on dividends and 24% on gains for an additional rate taxpayer. But tax is due again when money leaves the company, and there are running costs. Our FIC vs personal investing calculator gives a rough comparison of the two.

It depends on the family's circumstances, and there is no fixed minimum. The company has to cover set-up costs and ongoing accounts and filings, and the benefit grows with the amount invested and the time it is left to grow. As a conservative guide, it tends to be considered where the sum is substantial and not needed for living costs. A free call is the best way to test whether it is worthwhile for you.

Yes, a minor can hold shares, though in practice they are often held for the child by a trust or by the parents as trustees. The settlements rules matter: where a parent gifts shares to an unmarried child under 18, dividend income above £100 a year from that gift is taxed on the parent, which undermines the benefit. Gifts from grandparents or others are not caught in the same way.

You can, but moving existing property in is a disposal at market value. That means capital gains tax for you on any gain and, for a UK property, stamp duty land tax payable by the company on the market value. Because of that cost, it is often better to buy new property through the company, or to use cash. Property inside a company also has different financing and tax features, so it needs separate advice.

Yes, this is a common route. After selling a business, the proceeds can be lent to the family investment company so future growth builds up outside the estate. A holding company can also lend to or invest in a family investment company, or the family company can sit above a group in a restructure. The route chosen affects tax on the sale and on extraction, so it should be planned before completion.

A great deal. The parents are usually the directors and hold the voting A shares, so they decide what the company invests in and whether and when to pay dividends, while children hold non-voting shares. The articles and a shareholders' agreement can set out what the children can and cannot do. The company is also run by directors under company law, so those duties apply from day one.

It can help reduce the risk, but nothing can guarantee it. We design for protection as well as tax: growth shares held through a family trust, articles with pre-emption rights and compulsory transfer on divorce or bankruptcy, non-voting shares, the older generation in control, and a shareholders' agreement. We also encourage pre-nuptial agreements. Family courts can still take interests in a company or trust into account, and insolvency rules have their own reach.

HMRC set up a small team in 2019 to look at family investment companies. It was disbanded in 2021, and HMRC was reported to have found no evidence of a link between setting up a FIC and non-compliance. FICs are now handled like any other company. Well-designed structures that respect the settlements rules, the gift with reservation rules and proper documentation are a normal part of family wealth planning.

It is our usual approach: a family investment company with a discretionary trust as one of its shareholders. The older generation hold freezer shares, usually with the votes, so their value is fixed and they keep control. Growth shares in separate classes go to the children and to the trust, which can benefit grandchildren and future generations. The trust brings its own inheritance tax charges, so the design and share values need care.

A trust adds flexibility the company alone lacks. Shares held by trustees can benefit whichever family members need help later, including grandchildren not yet born, and are one step removed from any one person's own assets. The cost is the trust inheritance tax regime: a 20% charge on value above the nil-rate band going in, and charges of up to 6% every ten years and on exits. The settlor should not be able to benefit.

No. Every family investment company we set up starts with a blank piece of paper. We begin with what the family wants, how it works and what it needs back, then design the share classes, funding, any trust, the articles and the shareholders' agreement around that. Funding is often a mix of loans, gifts and transfers of assets, and the legal documents are drafted by our in-house legal team or with the family's own solicitor.

When the sums are small, because the costs outweigh the benefit. When you need the money for income now, since access is limited to loan repayments and dividends. When life expectancy is short, since the growth benefit needs time. And when you want assets to qualify for inheritance tax Business Relief, since family investment company shares are generally investment shares and do not. Other structures may then suit you better.