A family investment company for business owners: sale proceeds, surplus cash and the next generation.

Plan before completion, set up around it. The structure and the order of steps should be agreed before you sign, because the sale itself, any pre-sale restructuring and your reliefs are decided by then. The company can often be formed before the sale and funded when the proceeds arrive. Putting your trading shares into the company before a sale is a different matter, with its own risks and tax costs.

Usually by loan. After the sale and any tax on it, you lend part of the proceeds to the company, which invests them, and you subscribe for freezer shares with a small amount. Value can also be gifted for shares, with cash given to adult children who subscribe, or the trust. A holding company that sold a subsidiary can fund the structure in other ways. The mix depends on your access needs and tax position.

Not if the proceeds go in after the sale. Relief is claimed on your disposal of the trading shares: 18% on up to £1m of qualifying gains from 6 April 2026, with the usual two-year conditions. The company then receives money, not the business. But Business Asset Disposal Relief is not available on shares in an investment company, so you cannot later claim it on the family investment company itself.

It is lost. Business Relief applies to qualifying business property, such as shares in a trading company, not to cash. Once the business is sold, the proceeds are ordinary assets in your estate, liable to inheritance tax at 40% at death, and a family investment company that mainly holds investments cannot qualify either. For that reason many owners look to move the growth on the proceeds outside their estate.

Only what you do not need for living costs and can leave to grow for a long time. Keep enough outside the company for your lifestyle, tax bills and any plans such as buying a home. How much to put in depends on whether you want access through loan repayments, how much you want out of your estate, and whether other structures suit you better. A free call is the place to test the numbers.

Not directly if you own both companies personally. A dividend to you is taxed at 10.75%, 35.75% or 39.35% in 2026/27 above the £500 allowance. If a holding company or the family investment company sits above the trading company as its shareholder, dividends up to it are normally exempt from corporation tax, but that changes the structure and has consequences for reliefs. It needs planning, not a quick move.

Not on the same gain. Tax on the sale is paid once, by the seller, at capital gains tax rates, or by a selling holding company. Lending the proceeds to a family investment company is not a disposal, and a gift of cash is not a taxable gain either. After that the company pays corporation tax on its own income, such as interest, and you pay tax on any dividends you receive. Inheritance tax is a separate question about the growth.

A holding company sits above one or more trading companies and holds their shares, mainly for group structuring: moving profits up tax-free, ring-fencing cash and preparing for a sale. A family investment company is owned by the family to hold and grow family wealth, with share classes for different generations. They can work together, and our sister firm Holding Company advises on the holding company side.

No. Many family investment companies are funded personally, from sale proceeds or savings, with no holding company. A holding company is useful where you want surplus cash from the trading company moved out of the trade tax-free, or where you plan a sale. It can be inserted before or after the family investment company, and each choice has timing and clearance points. We look at the whole picture.

Usually not without a cost. A transfer to a company you control is a disposal at market value to a connected person, so capital gains tax can arise before the sale, and Business Asset Disposal Relief is not available on shares in an investment company. Share exchanges are also subject to a main purpose test. Where the idea is tempting, we model the cost first, and it often favours selling first.

As early as you can, and ideally before heads of terms are agreed. The earlier the planning starts, the more options remain, including any restructuring of the group and decisions about who holds shares. Some steps need clearances or time limits, and cannot be rushed once a buyer is waiting. Even a few weeks gives us time to design the structure and the order of the steps.

Within limits. The usual sources are repayments of your loan, which are not taxed as income, and dividends on any shares you hold, taxed at dividend rates. Salary is only for real work. Profits taxed at 25% in the company and then paid as dividends to an additional-rate taxpayer give an effective rate of about 54.5%, so the structure suits long-term reinvestment more than heavy regular income.

Each founder can have their own plan, or they can combine in one company with separate classes, loans and trusts for each family. Each individual has their own Business Asset Disposal Relief limit of £1m, their own nil-rate band and their own gifting position. Separate companies keep the families apart, while a shared company is simpler. We usually look at both, with each founder advised on their own position.

Rarely, on its own. A dividend is taxed at up to 39.35% in 2026/27 before you lend the rest to the company, which is a real cost. The sums should be compared with leaving the cash in the company, in a holding company or paying it out later. Where the cash is surplus and will never be needed in the trade, other routes may be cheaper.

No. A family investment company can still be funded from proceeds you already hold, by loan, gifted value for shares or both. What is lost is the chance to plan the sale itself. The tax on the sale is fixed, but the future growth on the money can still be moved outside your estate. The sooner it is done, the longer the growth has to build.

If you are selling, usually yes. A corporate finance adviser or broker markets the business and negotiates the price, while we advise on the tax structure of the sale and what to do with the proceeds. We work with your solicitor and accountant, and with a deal adviser if you have one. Our sister firm Transaction Tax Partners advises on tax on the sale itself.