Family Investment Company FAQs

No. The answers are general information written to help you understand the subject, not advice on your own circumstances. Tax rules change, and whether a family investment company suits you depends on your assets, your family, your goals and the documents involved. Please speak to us before you transfer assets, make gifts or sign anything. A free first call is the best way to get advice that fits you.

Because it does. The right structure depends on how much you can invest, where it comes from, who you want to benefit, how much control and access to the money you need, and how long you expect it to be invested. Two families with similar wealth can end up with very different recommendations. We say so plainly rather than give a headline answer that may not apply to you.

Before you move any money or sign any documents. Ideally, when a business sale, a property purchase or a major gift is on the horizon, since planning is easier before the cash arrives. Early advice lets us design the order of steps, check whether a family investment company is the best fit and avoid costs that are hard to reverse, such as tax on moving existing property.

Yes. The first call is free and carries no obligation, and you can use it to ask whatever is on your mind. You become a client only when you have agreed a written scope and quote with us. If a short answer is all you need, we will say so. We would rather give you a straight view early than have you take the wrong step.

The questions are grouped by topic across the site, and each page answers the questions most relevant to it. Questions about the tools are on the Tools page, questions about working with us are on the How we work page, and the Glossary explains the terms. If you cannot find an answer, book a call and ask us directly.

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.

Typically the parents or grandparents hold freezer shares, usually with the votes, so they keep control and their value is fixed. The children hold growth shares in their own classes, and a discretionary trust holds another class of growth shares for wider family or future generations. Alphabet classes let the directors choose which class receives a dividend. The split varies by family, and we design it from a blank piece of paper.

The company. Freezing the parents' value and placing the growth in other shares is what moves future growth outside their estates, and gifts of shares to individuals are potentially exempt transfers with no entry charge. The trust does not add to that saving and brings its own charges. What it adds is flexibility over who benefits and a layer of protection, and whether that is worth the extra cost depends on the family.

Alphabet shares are separate classes of the same type of share, so the directors can declare a dividend on one class and not on others. In a blended FIC that means income can go to the child with the lower tax rate, to the trust, or be retained, without dividend waivers, which HMRC can challenge as settlements. Each class must carry real capital rights as well as income, or the settlements rules can bite.

Adult children can be trustees, often alongside an independent trustee, but there are conflicts to think about. A child who is both a trustee and a beneficiary may be deciding on their own benefit or on their siblings', which can cause tension. Many families appoint one trusted family member and one independent person, so decisions are not left to either side alone. The trust deed can say who may be appointed and how trustees are replaced.

The trustees have discretion, so they can pay more to a child who needs help, pay less to one who is financially secure, or hold back if a child is going through a divorce or facing creditors. That flexibility is the main benefit of a trust, and a letter of wishes can guide the trustees. They must still act within the deed and consider all beneficiaries, and appointing shares or capital out of the trust can bring an exit charge.

A gift into a discretionary trust is a chargeable lifetime transfer, not a potentially exempt transfer. Tax is charged at 20% only on the excess over the settlor's available nil-rate band, currently £325,000, and each parent can use their own. Because the trust usually subscribes for newly issued growth shares at a low starting value, the transfer is often small. Later growth is then subject to the trust's periodic charges.

It is more complex and costs more to set up and run than a simple FIC. The trust brings its own inheritance tax charges, up to 6% every ten years and on exits, its own tax return and registration obligations, and its income is taxed at trust rates. The settlor cannot benefit. And any structure that leaves parents in control needs care over the gift with reservation rules. For smaller sums, a simpler company may be better.

When you want flexibility over who benefits, particularly for grandchildren not yet born, when you are concerned that giving a child outright ownership creates risk, or when you want some growth held one step removed from any individual. When the family is small, the amounts modest or the wishes simple, a company with only family shareholders may be enough. The choice comes from your objectives and family dynamics rather than from a template.

By the share classes. Each class subscribes for its own shares and takes the growth on them, so the split is built into the articles at the start, together with the hurdle for each class. Dividends can then be directed class by class, but capital follows the shares. Changing the split later usually means issuing new shares or altering rights, which can have inheritance tax and capital gains tax consequences, so we settle it with the family early.

It is a risk to manage, not one to ignore. Control alone through voting freezer shares is not usually treated as a reservation of benefit, and arm's-length directors' fees are usually fine. But any benefit that parents take from gifted shares, or any ability for the settlor to benefit from the trust, can bring the shares back into the estate. We design with that in mind and recommend you take advice before using any retained rights.

The parents' freezer shares form part of their estates at their fixed value and pass under their wills or the intestacy rules, so the articles and wills should work together to decide who takes the votes. Growth shares held by children and the trust are already outside the estates. The trust carries on, with its trustees continuing to hold its shares. A shareholders' agreement can set out succession of control.

Yes, and it is a common variation. Grandparents can fund or hold freezer shares while parents and the next generation hold growth shares, or both generations can contribute. Gifts from grandparents to minor grandchildren generally fall outside the parental settlements rule, though HMRC looks at reciprocal arrangements or where a parent provides the money. Each person who settles uses their own available nil-rate band.

No. It is our signature approach and suits families who want control, a growth transfer and some flexibility or protection through a trust. It is not suitable if the sums are small, if the parents need the capital back, or if the family would find the trust and company combination hard to run. We design each structure around what the family wants, and sometimes the answer is a simpler company or no company at all.

They hold the trust's growth shares on behalf of the beneficiaries and decide, within the powers in the trust deed, who receives dividends or capital and when. They exercise any rights attached to the trust's shares, usually with a letter of wishes from the family to guide them, keep trust records, register the trust, and file tax returns where income arises. Choosing trustees who are trusted, available and able to act independently is one of the key design decisions.

Trustees pay income tax at 39.35% on dividends in 2026/27, and 45% on other income. A trust with net income of £500 or less pays no income tax on it, but above that the whole amount is taxable. When trustees pay income to a beneficiary, the beneficiary's own tax position then matters. Directing dividends to the family member best placed to receive them is one reason for using alphabet shares.

Usually yes, because the trust adds its own administration: registering on the Trust Registration Service, keeping the trust's records, and filing tax returns where income arises. You also need trustees who understand their role. The extra cost has to be set against the extra flexibility and protection, and for smaller sums a simple company may be the better value. We discuss the running costs before you commit.

It can be done with care, usually by issuing new growth shares to a new or existing trust and, where needed, altering the rights of existing shares. Changing share rights in a close company can be a transfer of value for inheritance tax and a value shift for capital gains tax, so it needs advice. Where the company is young and the values low, the cost of adapting it is often modest.

Yes. A solvent company can be wound up in a members' voluntary liquidation, where a licensed insolvency practitioner realises the assets, pays the debts, including any shareholder loans, and distributes what is left to the shareholders. The tax outcome depends on how the assets are dealt with, who the shareholders are, and what they do afterwards. It is worth planning well before the decision is taken.

A distribution of share capital in a winding up is not an income distribution, so it is normally taxed as a capital gain on the shares, not as a dividend. For an individual that means capital gains tax at 18% or 24% (2026/27) on the gain over the cost of the shares, after the annual exempt amount. An anti-avoidance rule can turn it into income, so planning matters.

It is a targeted anti-avoidance rule in section 396B of the Income Tax (Trading and Other Income) Act 2005. It treats a winding-up distribution as a dividend, taxed at dividend rates, where four conditions are all met: you held at least 5% of the company, it was a close company, within two years you carry on a same or similar activity, and a main purpose is to avoid or reduce income tax.

It might. The third condition looks at whether, within two years after the distribution, you are involved in carrying on a similar trade or activity. It refers to an activity, not only a trade, so continuing to invest, or starting a new investment company, can meet it. HMRC's view on investment companies is not settled, so we take advice on each case, and the main purpose test is also part of the analysis.

No. The relief requires a trading company, or the holding company of a trading group, throughout the two years before the disposal. A company that exists to hold investments does not meet that test, so shares in an investment FIC don't qualify, including on liquidation. The rate if it did apply is 18% from 6 April 2026, with a £1m lifetime limit, so don't plan on it.

Yes. A company pays corporation tax on its chargeable gains, not capital gains tax. A close investment-holding company pays 25%. There is no indexation allowance for growth after 2017, and companies have no annual exempt amount. The gain is taxed in the company first, and the shareholders are then taxed on what they receive, which is why closing a FIC with large gains can be expensive.

Because there are potentially two layers of tax. The company pays corporation tax on gains it realises when it sells investments, and the shareholders pay tax on the distribution. Unlike assets held personally, assets inside a company do not get a tax-free uplift when a shareholder dies. This is one reason we look at the exit when we design the company, and are honest about it.

It is repaid first. The loan is a debt owed to the parents, so the company repays it before anything is distributed to shareholders. Repaying the principal is not taxed as income. Any interest charged is taxable to the lender. If the company does not have enough cash, assets may have to be sold, which is when corporation tax on gains can arise, so we plan the order of repayments.

The trustees receive the winding-up distribution on the shares they hold. It is normally capital, and trustees pay capital gains tax at 24%, with a smaller annual exempt amount. If the trustees then pay cash or assets to a beneficiary, an inheritance tax exit charge, of up to 6%, can apply. The amount depends on the trust's history, so we model it before a decision.

Possibly, but a distribution of assets in kind is not simply a transfer. It can be a disposal by the company, with tax on any gain, and for UK property stamp duty land tax and other costs can arise. The shareholders then hold the assets personally, and the tax position of each is different. We compare a sale and a distribution in kind before recommending either.

Often, yes. Repaying the loan, paying dividends over time and leaving the company in place can avoid a large single charge and keep the structure available for later generations. Closing makes sense where the company has no further purpose, where the costs outweigh the benefits or where the family wants to simplify. We compare running down and closing using the family's figures.

It can. On death, the shares are treated as acquired at market value by the personal representatives, with no capital gains tax on the increase. Assets inside the company keep their original cost. A liquidation after death can therefore produce little gain on the shareholder's shares, while the company's own gains are still taxed. The timing and the inheritance tax position both need to be reviewed together.

A dormant company with no assets and no debts can sometimes be struck off, but a company holding significant assets is not a good candidate. A formal liquidation gives certainty about the tax treatment and who receives what, and is the normal route for a solvent FIC with value in it. Using the wrong route can leave tax and legal loose ends, so we advise on the choice.

The shareholders' agreement and the articles should say. Typically the other family shareholders, the trust or the company have the right to buy the departing shareholder's shares at a valuation method agreed in advance. Closing the whole company because one member wants to leave is usually a poor outcome, so we build an exit route into the documents when the company is set up.

For a solvent winding up of a company with assets, you will normally appoint a licensed insolvency practitioner as liquidator. The shareholders pass the resolutions and the directors make a declaration about the company's ability to pay its debts. We coordinate the tax planning with the liquidator and the family's accountant and solicitor, so the steps happen in the right order.

Gifts of shares made earlier remain separate transfers, and the seven-year clock on them is not reset by closing the company. What changes is where the value sits afterwards: assets distributed to the children are in their hands, assets paid to the parents come back into their estate, and the loan repayment is cash the parents hold. We review the inheritance tax position before closing.

It is a close company that does not exist wholly or mainly for a permitted purpose, such as trading, letting land commercially or holding trading subsidiaries. A typical family investment company that holds a portfolio of shares, funds, bonds or cash falls into this category. The label matters because such a company cannot use the 19% small profits rate or marginal relief, and pays corporation tax at 25% on all its taxable profits.

Those that exist wholly or mainly for a permitted purpose. A company letting land commercially, for instance to unconnected tenants, is outside the label, as is one whose main business is holding shares in trading or commercially letting subsidiaries. A letting to the company's connected persons or their relatives is not commercial. A company that mainly holds a portfolio is caught, even if it also owns a trading subsidiary.

Usually not. Dividends and other distributions received by a UK company are chargeable to corporation tax only where they are not exempt, and most dividends on a portfolio of UK and overseas ordinary shares are exempt under the Part 9A rules. That lets the company reinvest them in full. Income tax arises only when the company pays dividends to its shareholders. Exceptions exist, so the position for each holding is checked.

Often, but it depends on the payer and the class of shares. For a small company recipient, the payer must be resident only in the UK or in a qualifying territory with a suitable tax treaty. For a larger recipient, the dividend must fall within an exempt class, such as distributions on non-redeemable ordinary shares or portfolio holdings of under 10%. Anti-avoidance rules also apply, so we review holdings before relying on the exemption.

Interest and other returns on loans, bonds, gilts and deposits are taxed as loan relationship credits. Credits are netted against debits to give a non-trading profit, which is taxed, or a deficit, which can be relieved. In a close investment-holding company the rate is 25%. Interest therefore tends to be the least tax-efficient income for the company, and investments are often chosen with that in mind.

A company pays corporation tax on its chargeable gains rather than capital gains tax, so a close investment-holding company pays 25%. There is no annual exempt amount for companies, and no indexation allowance for growth after December 2017. The substantial shareholding exemption can exempt the sale of a trading subsidiary where its conditions are met, but it does not cover gains on a portfolio of quoted shares or funds.

No on both counts. The £3,000 annual exempt amount belongs to individuals, personal representatives and certain trustees, not companies. Indexation allowance was frozen at December 2017, so there is none for assets bought after that date or for growth after it. A family investment company therefore pays tax on the whole gain, which is one reason long-term holdings of growth assets are often preferred.

A company with investment business can deduct the expenses of managing it from total profits, such as investment management fees. Capital expenses and expenses connected with investments held for an unallowable purpose are not deductible, and apportionment must be just and reasonable. Genuine salary or directors' fees can also be claimed as a management expense. Personal costs of the family are not allowable.

If a company holds units in a fund that, at any time in the accounting period, has more than 60% of its investments in interest-bearing and similar assets, the holding is treated as a loan relationship. It is taxed on a fair value basis, so annual movements in value are taxed or relieved as income, and distributions are not treated as exempt dividends. Mixed funds and bond funds should be checked before purchase.

They can. For a fund without reporting fund status, a company investor is taxed on distributions as income, and on sale the gain is an offshore income gain charged as income instead of a chargeable gain. Losses on sale are not recognised in that calculation. The rules are technical and have been amended recently, so we check the status of any offshore fund before it goes into the company.

Not usually. A passive holding company is ignored when counting associated companies only if it has no assets other than shares in its 51% subsidiaries, no income other than dividends it passes on, no chargeable gains and no management expenses. A family investment company holding investments will not meet those conditions. Associated company rules affect a family investment company that is not a close investment-holding company, or the trading companies it controls.

None have been published yet for the financial year from 1 April 2027. The rates for the year from 1 April 2026 are 25% on profits over £250,000, 19% on profits up to £50,000 and marginal relief in between. A close investment-holding company pays 25% regardless. We keep the position under review, and our calculators use the rates in force at the time and say which year they apply to.

A close company is one controlled by five or fewer participators, or by participators who are directors, which includes most family investment companies. It matters in several ways: it is the starting point for the investment-holding label, a loan made by the company to a shareholder triggers a tax charge, and certain transfers of value are apportioned to shareholders for inheritance tax. Exceptions are set out in the legislation.

The company pays a charge on the loan. For loans made on or after 6 April 2026 the rate is 35.75%, the dividend upper rate, paid nine months and one day after the end of the accounting period. It is refundable when the loan is repaid. For earlier loans the rate is 33.75%. Loans to shareholders are therefore avoided or managed carefully, particularly in a company where parents also act as directors.

As an illustration, profits taxed at 25% in a close investment-holding company and then paid out as a dividend to an additional-rate taxpayer at 39.35% leave an effective rate of about 54.5% (25% plus 39.35% of the remaining 75%). That is why a family investment company suits long-term reinvestment and loan repayments more than regular dividend income for high earners. Most dividends the company receives are exempt, which softens the first layer.

Sometimes. If interest and other non-trading credits are less than the matching debits, the company has a non-trading deficit that can be relieved against other profits, subject to the rules. A loss on selling investments is a capital loss and is set against chargeable gains, not income. Because family investment companies mainly produce exempt dividends and growth rather than taxable income, losses are rarely a significant issue, but they should be tracked.

Yes. Once the company repays your loan, the cash is yours again, and any amount you keep forms part of your estate for inheritance tax. That is the trade-off for tax-free access: the more you draw, the less stays outside. Many families take only what they need to live on and leave the rest in the company, so that the loan, and the growth on top, are not turned back into estate cash.

If the company pays interest on a shareholder's loan, it must deduct basic-rate income tax, 20% at the time of writing, from the payment and report and pay it to HMRC quarterly on form CT61. The lender receives the interest net and is taxed on the gross amount through their tax return. A loan with no interest does not need CT61, which is why many family loans are interest-free.

You can, but it is not what we recommend. A dividend waiver is a decision by a shareholder to give up a dividend so that others can be paid more. HMRC can challenge waivers as settlements, so the waived income may be taxed on the person who gave it up. Alphabet shares are separate classes, each with its own right to dividends, so the board can pay different amounts to different classes without anyone waiving anything. They are cleaner, and we prefer them to waivers.

Usually not. A discretionary trust pays income tax at 39.35% on dividends, regardless of the lower rates the individual beneficiaries might pay. Trustees can then pay income on to beneficiaries, but the tax credit rules are technical, so the route is planned in advance. The £500 de minimis can help a small trust. The trust rate is one reason dividends to the trust are usually kept modest or reinvested, with the growth in value doing the work.

Yes, if it pays for real work done. A salary is deductible only if it is paid for genuine services, and for an investment company it is claimed as a management expense. It is subject to income tax and employer and employee national insurance, so it is rarely the most efficient route. Fees that are too high, or not linked to genuine work, risk being disallowed, and benefit linked to gifted shares can cause inheritance tax problems.

Employer Class 1 national insurance is 15% on pay above the secondary threshold of £5,000 a year in 2026/27. The Employment Allowance of £10,500 may reduce the bill, but the company must meet the eligibility rules, which we check, especially where the director is the only employee. Employee contributions are also due. Taken together with income tax, a salary can cost more than dividends or loan repayments.

Usually loan repayments, as they are not taxed as income, which makes them the cheapest route in tax terms, while dividends are taxed on the recipient at 10.75%, 35.75% or 39.35% above a £500 allowance. The right order depends on your tax position, the children's needs, how much you want to keep inside the company and how the loan is documented.

The loan is only a route back to your own capital. Once it is repaid, the options are dividends on shares you hold, interest on any new loan you make, and pay for work you do. Dividends on freezer shares can be set at a modest fixed rate, if the articles allow it. Many families top up the loan in later years, for example with sale proceeds, so that there is more to draw.

It can. Loan repayments return your own cash to you, so what you do not spend is back in your estate. Dividends on shares you gave away go to the new owners, so the money stays outside your estate, but it is taxed on them. Dividends on shares you keep end up in your hands. The calculators show the effect of different withdrawal patterns, which is worth understanding before you draw.

In Jones v Garnett, the House of Lords held that dividends on ordinary shares given outright to a spouse were not the donor's income, because the shares were not wholly or substantially a right to income. HMRC follows this in its manual. It shows that shares carrying real capital rights can be safe, but shares with only income rights, such as non-voting shares with no capital entitlement, can fail. Share design matters.

Not especially. Tax is paid in the company and again when dividends are paid out, which for an additional-rate taxpayer comes to about 54.5% on profits that were taxed at 25% in the company. Loan repayments avoid that, but they return capital rather than create income. The structure suits long-term reinvestment and passing on growth, rather than providing a salary replacement, and we say so plainly.

No, not for an investment company. The relief needs a trading company, or the holding company of a trading group, throughout the two years before the disposal. A distribution on winding up is normally taxed as a capital gain on the shares, but anti-avoidance can treat it as income where you carry on a similar activity afterwards. Closing a company is a separate decision that needs advice.

No. Many families take little or nothing, and let the company reinvest. There is no requirement to pay dividends, and loan repayments are on terms you agree with the company. If you do not need the money, leaving it in is usually the most tax-efficient choice, as it avoids a second layer of tax and keeps growth building for the next generation. The company is not designed to pay out a fixed income.

As a movement on the director's or shareholder's loan account, supported by a loan agreement and a board decision to repay. The accounts should show the balance each year. This matters because repayments are only tax-free if the money is genuinely a repayment of a loan, not income. A clear paper trail also answers any question from HMRC, and lets your accountant prepare the accounts without having to query the figures.

Yes. Repayment of the loan is a return of your own money and is not taxed as income. Interest the company pays is income to you, taxable at your own rates, and the company deducts and reports basic-rate tax on it. The interest is deductible for the company. Individuals' savings rates rise to 22% basic, 42% higher and 47% additional from 6 April 2027, so interest is often kept low or nil.

Not as of right. Dividends are declared by the directors, usually the parents, and paid to the classes of shares they choose. Shares can be non-voting, and the articles and shareholders' agreement can limit when and how shares are sold. Children can be given a say as they mature, but control normally stays where the family has decided. This is one of the things that makes a family investment company attractive to parents.

We design the tax structure and the plan, and the accountant keeps the client's accounts, corporation tax return and personal tax work. We send a written recommendation and a structure chart, tell the accountant which filings and records the company will need, and stay available for technical questions. The accountant remains the client's accountant. We work with the one the client already has.

Whether the client has funds they can give up or lend for the long term; whether the company would be a close investment-holding company taxed at 25%; whether it would be an associated company of any other company the client controls; and how money will come out. Also check the settlements rules for minor children, and whether Business Relief or other planning would fit better.

Yes. We give tax advice and do not advise on what the company invests in, which is a matter for the client and their regulated financial adviser. The IFA can continue to manage the portfolio, with a mandate from the company. We help with how the investments are taxed inside the company, so the product choices suit a corporate investor.

It can. Most dividends a company receives are exempt, but interest and gains are taxed. A holding in a fund that is more than 60% in interest-bearing assets can be taxed on a fair value basis as a loan relationship, and a non-reporting offshore fund gives income treatment on disposal. Funds that suit an individual may not suit a company, so product review is worthwhile.

Yes, and many clients prefer that. We prepare the tax design and the instructions, the solicitor drafts the trust deed, articles and shareholders' agreement, and we review them against the plan. The alternative is our in-house legal team drafting them. The choice is the client's, and we will work with whichever route they prefer.

When they do not have a solicitor with family investment company experience, or want one team responsible for the tax design and the documents. The in-house legal team drafts the trust deed, articles and shareholders' agreement in line with the structure. The solicitor-led route remains available, and the client can change their mind. A client's own lawyer can always review the documents.

Our team prepares the valuation of freezer and growth shares in-house when shares are created or gifted. That keeps the valuation consistent with the tax plan and the documents. Valuing unquoted shares is a judgement, and HMRC values each case on its facts, so we explain the basis and the assumptions in writing, and the adviser can see them.

A short summary is enough: who the client and their family are, roughly how much might go in and where it comes from, the main assets and their base costs, any existing companies or trusts, what the client wants to achieve, and any dates that matter. Where possible, include the client's current will, if any, and whether they have a solicitor. Please check the client is content for you to share it.

That the first call is free, that it is a conversation and not a sales pitch, and that we may tell them a family investment company is not right. It helps if they have a rough list of assets and liabilities, the children's ages and any thoughts on control. Tell them we respond the same working day, and that you stay their adviser.

Yes, and we encourage it where you are happy to. You know the client and their circumstances, and being on the call means the advice is delivered once, to everyone. If you prefer, we can report to you first and you can pass it on. Tell us how you would like to be involved when you make contact.

To the client, with a copy to the adviser if the client agrees. The recommendation is addressed to the client because they are the person taking the decision. We are happy to talk it through with you first, in whichever order suits the relationship. We agree this at the outset, and the client always knows who is advising them.

The settlements rules on dividends to a parent's minor child, gift with reservation where the donor takes a benefit, the lack of income tax relief on personal borrowing to fund a close investment-holding company, the effect of associated companies on the corporation tax limits, the lack of Business Relief and Business Asset Disposal Relief, and the effect of altering share rights on existing shares.

Yes, but the structure needs care. A FIC can sit above a holding company or alongside it, and each arrangement has different tax consequences for associated companies, Business Relief and the trading tests. Our sister firm Holding Company covers the group side. We work with the client's corporate advisers on how the two fit together.

Yes. We can review the structure, the share classes, the loan account and the documents, and tell the client what works, what could be improved and what to watch. Converting existing shares into freezer or growth classes is possible but needs care, because altering share rights can be a transfer of value for inheritance tax and a value shift for capital gains tax.

Yes. A family investment company works best when the wills, lasting powers of attorney and letters of wishes fit the structure, and when any pre-nuptial agreements are handled by a family lawyer. We will say what the documents need to say and leave the drafting to the client's lawyer, or to our in-house legal team if the client prefers.

We work with the client's corporate finance and tax advisers, because timing matters. Putting sale proceeds into a family investment company is a different question from structuring the sale itself. Our sister firm Transaction Tax Partners covers sale planning, and we cover where the proceeds go. Speak to us before the sale completes if you can.

It depends on the engagement. Often the client's accountant or company secretary handles the confirmation statement and accounts, and the trustees or their adviser handle the Trust Registration Service. We list each obligation in a compliance note with who is responsible for it, so nothing falls between advisers. We can take on filings if the client prefers.

Yes. A family investment company can own the shares in your holding company, so the family's trading group sits underneath it. The usual routes are a gift, a sale or a share exchange. Each has different tax consequences, including capital gains tax on the shares moving and the effect on Business Relief, so the route is chosen after modelling the group. If the group already has a holding company, the family investment company simply becomes its shareholder, with the family owning the shares in the family investment company.

Above means the family investment company owns the holding company, so dividends travel up to it and the whole group sits under one structure. Alongside means the family owns both separately, and surplus cash reaches the family investment company in other ways, such as dividends, a sale of assets or fresh subscriptions. Above is simpler for moving cash but ties the investment side to the trading group. Alongside keeps them apart, which can matter for Business Relief and for a future sale.

Normally no. Dividends paid by a company that the family investment company controls are exempt from corporation tax, whether the receiving company counts as small or not. That lets cash move up to the family investment company without a tax charge on the way. The tax arises later, if and when the family investment company pays dividends to its own shareholders, who are taxed at 10.75%, 35.75% or 39.35% above their £500 allowance.

Often yes. The substantial shareholding exemption exempts a company's gain on selling shares where it has held at least 10% for 12 continuous months in the six years before the sale and the company sold is a trading company or the holding company of a trading group. The investing company no longer has to trade itself. The conditions are strict and tested on the facts, so we check them before any sale is agreed.

It is not compulsory, but you should consider it. Share exchanges into a new holding company are now subject to a main purpose test for shares issued on or after 26 November 2025, which asks whether a main purpose is avoiding capital gains tax or corporation tax. Advance clearance is available from HMRC for capital gains and, separately, for income tax on transactions in securities. We normally apply for both together where an exchange is part of the plan.

Usually yes. Companies are associated if one controls the other or the same people control both, so a family investment company run by the parents who also control the trading group will normally be associated with it. The £50,000 and £250,000 corporation tax limits are then divided between them. A family investment company holding portfolio investments pays 25% anyway, but the trading company's own small profits band can shrink.

They can. Shares in a company whose business is wholly or mainly being the holding company of trading companies can qualify, but shares in a company that mainly holds investments cannot. From 6 April 2026, 100% relief applies to the first £2.5m of combined business and agricultural property per person, and 50% above. Assets that are not used in the business, such as surplus cash, are excluded from relief, so the balance has to be watched.

The risk is that the company stops being mainly a holding company of trading businesses. If the portfolio of cash and investments grows to dominate, the whole company can lose relief, not just the surplus. Even short of that, assets not needed in the business are excepted assets and carry no relief. HMRC also looks across the whole group when testing trading activity, so cash moved up from the trading company still counts in that test.

It can. Moving shares to a company you control is a disposal to a connected person, treated as made at market value even if you receive nothing or little. A gain can arise even though no cash is received. A share exchange can sometimes be structured so no gain arises, subject to the main purpose test, and holdover relief can apply to gifts of shares in a trading company or trading-group holding company. Which route fits depends on the structure and your plans, so we model it first.

A gift of shares for no consideration does not usually attract stamp duty, and the transfer form generally does not need to go to HMRC. If the family investment company pays for the shares, or takes on or releases a debt, that counts as consideration and stamp duty is charged at 0.5% of it, rounded up to the nearest £5, with none due at £1,000 or less. The funding route therefore decides the stamp duty bill.

Not necessarily. Control of the business then runs through the family investment company's voting shares, which parents often keep, with growth shares held by children or a trust. Retaining votes is not of itself a gift with reservation, but benefit taken from gifted shares can be, so director pay and any buy-back rights need care. We design the voting and the family's role together, so it fits how your family actually makes decisions.

It can, so the exit has to be planned at the outset. The relief is for individuals selling shares in a trading company or the holding company of a trading group, held throughout the previous two years, at 18% from 6 April 2026 on up to £1m of lifetime gains. Shares in a family investment company that mainly invests do not qualify. A sale by the family investment company itself is a company sale, not an individual one.

Only within a group relationship. Group relief for losses needs a 75% link: one company a 75% subsidiary of the other, or both 75% subsidiaries of a third. Where the family investment company owns 75% or more of the trading company, that link can exist. Whether there are losses to share is a matter of the facts, and the family investment company's investment income and gains rarely produce them.

No. An investment company inside a group is usually a sister or subsidiary company that holds surplus cash and investments, owned by the same shareholders as the group. A family investment company is designed around the family: it has share classes that give children or a trust the future growth, and a plan for control and extraction. Some families use a group investment company first and later add a family investment company above it.

Usually the holding company, if you do not already have one, because it gives the group a clean top company to put under the family investment company. Doing the steps in the wrong order can add capital gains, stamp duty or clearance work. If a sale is coming, the order matters even more. Our sister firm holding-company.co.uk covers inserting a holding company in detail, and we plan both steps together.

It depends on the value and on what the family wants. The structure has set-up and running costs, so it tends to make sense where the group is worth a seven-figure sum or more, or where surplus cash and a succession plan are real issues. Families we work with range from about £1m to £50m. On a free first call we can tell you honestly whether the step is worth taking now, later or not at all.

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.

It depends on their ages, their circumstances and how much control you want to keep. Adult children can hold shares directly, and a gift to them is a potentially exempt transfer. A discretionary trust suits younger children, grandchildren yet to be born or a child you would rather not hand capital to outright. Trusts add entry and ten-yearly charges and registration, so many families use both: direct gifts to some, a trust for the rest.

Yes. Once a child is 18 or over, dividends on shares they own outright are their own income, using their personal allowance, £500 dividend allowance and basic rate band, and then 10.75%, 35.75% or 39.35%. HMRC still looks at the arrangement as a whole, so the shares should carry real rights rather than only a right to income. A child with little other income can receive a meaningful sum with little or no tax.

Where a parent gives shares, or the cash to subscribe for them, to a child under 18 who is unmarried and not in a civil partnership, the income is treated as the parent's. There is one exception. If the child's total income from the parent's gifts is £100 or less in the tax year, the rule does not apply. Above £100, all of the income is taxed on the parent, not just the excess.

Generally yes. The rule that taxes a child's income on the parent applies only to gifts by a parent. Dividends on shares given by grandparents to minor grandchildren are not caught, unless the arrangement is reciprocal (each set of parents funds the other's children) or the parents provide the money. Grandparents also do not need to be shareholders: they can fund a trust. We check the facts before any gift is made.

Seven years. A gift of shares to another individual is a potentially exempt transfer, so there is no inheritance tax if you live seven years. If you die within that period, the gift uses your nil-rate band first and may be taxed if it exceeds £325,000. Gifts made more than three years before death qualify for taper relief. The seven-year clock is the main reason families start early.

Taper relief reduces the tax, not the value, on a gift that becomes taxable because you die within seven years. Tax on gifts made three to four years before death is charged at 32% instead of 40%, then 24%, 16% and 8% in the following years. It only matters where the gift is larger than the nil-rate band. Gifts within the nil-rate band are not helped by it.

Yes. Separate share classes, often called alphabet shares, let the company declare different dividends on each class. One child might receive income now, another might be building up growth for later, and a child who is not interested in the company can be paid in other ways. This is far more flexible than dividend waivers, which HMRC can challenge as settlements. The structure is designed around your family, not a template.

Yes, and it is a common method. A cash gift from a parent to an adult child is a potentially exempt transfer, and the child then pays for new shares in the company. A gift made straight to the company is not a potentially exempt transfer, because it is not a gift to an individual, so it is treated as an immediately chargeable transfer instead. For minor children the settlements rules also apply.

Possibly. A gift of shares is a disposal at market value for capital gains tax, because a child is a connected person, even though you receive no money. Gifts between spouses are no gain, no loss. Business gift holdover relief does not apply to shares in an investment company. In practice the gain is kept small by giving shares when the company is first set up, before it has grown.

Yes, for gifts to individuals. The £3,000 annual exemption (with one year carried forward), small gifts up to £250 per person, wedding gifts of £5,000 to a child, £2,500 to a grandchild or £1,000 to others, and regular gifts out of surplus income are all exempt. They do not apply to gifts made to a company. The exemptions are modest beside the sums a family investment company holds, but they add up over the years.

Through a discretionary trust, yes. A trust can name its beneficiaries as a class, such as the settlor's children and grandchildren, including those born later. The trust holds growth shares in the family investment company, and the trustees decide who benefits and when. A company on its own cannot do this, because shares must be issued to people who exist. The trust is therefore a natural partner for a family planning across several generations.

Each person can settle up to the available nil-rate band, currently £325,000, with no entry charge, so a couple can put in £650,000 between them if neither has made other chargeable transfers in the previous seven years. Above that, the lifetime rate is 20%. Settling newly issued growth shares, which have a low value at the start, keeps the transfer small. Valuation matters, which is why our team prepares it in-house.

A family investment company is designed for that. The parents usually hold the voting shares and act as directors, so the children do not control anything. Shares for younger children can be held by a discretionary trust, and the articles can restrict transfers. Dividends can be paid or held back as the family decides. Nobody has to receive capital outright before they are ready, which is difficult to achieve with a simple gift.

As much or as little as you decide. In many families the parents hold the voting shares and the children's shares carry no vote, so they take part in the growth but not the decisions. In others, children are given a voice as they mature, through board seats, family meetings or voting shares. The right balance is set in the articles and shareholders' agreement, and can change as the family does.

It can raise extra points. Shares a family member receives because of the family relationship are normally outside the employment-related securities rules, but a child who is also a director or employee of the company should be reviewed. Any pay must reflect real work, and benefits linked to the gift can be a problem. We look at it with you when the structure is designed, not afterwards.

Shares in a private company are valued on a hypothetical open-market sale between a willing buyer and seller. There is no standard discount for minority holdings, and HMRC values each case on its facts. Growth shares issued with a hurdle at or above the company's current value usually have low value when issued. Our team prepares the valuation of freezer and growth shares in-house when shares are created or gifted.

Sometimes. A company that exists wholly or mainly to let land commercially is not a close investment-holding company, so it can use the 19% small profits rate and marginal relief rather than a flat 25%. Letting to unconnected tenants counts as commercial. The £50,000 and £250,000 limits are divided by the number of associated companies plus one, so other companies under the same control reduce the benefit. Larger portfolios, or groups with several associated companies, often pay at or near 25%.

A letting to a person connected with the company, or to their spouse, civil partner or relatives, is not a commercial letting. A family investment company that lets a home to a child, for example, is likely to be a close investment-holding company on that activity and pay 25% on all its profits, with no small profits rate. Whether the company is still mainly a commercial lettings business depends on the balance across the portfolio.

Usually yes. The transfer is a disposal to a connected company, treated as made at market value even if you are paid little or nothing, so capital gains tax at 18% or 24% can arise on the gain. For UK residential property, the gain must be reported within 60 days of completion. Stamp duty land tax is also due on market value. Reliefs exist, such as incorporation relief, but they depend on the facts.

Usually, yes. Where a company buys from a connected person, the chargeable consideration is not less than market value, even if you take back shares or a loan. In England and Northern Ireland, companies pay the higher residential rates, and a 17% flat rate applies to a dwelling over £500,000 unless a relief such as for a property rental business applies. Wales and Scotland have their own taxes.

Incorporation relief defers the capital gain when you transfer a business as a going concern, with its assets, to a company for shares. The gain reduces the base cost of the new shares. It needs a genuine business, not just ownership of a few lets. HMRC accepts this where an individual spends 20 or more hours a week personally running the activities and considers less case by case. From 6 April 2026 you must claim it; it is no longer automatic.

Not entirely, but it can help. Where the portfolio is a real business and the numbers support it, incorporation relief can defer the gain. The idea is to move the properties into a company with incorporation relief, then build the family structure around that company, rather than paying capital gains tax on a straight transfer. It is not always the right route, and stamp duty land tax still needs planning. We work with our sister firm propertytaxadvisory.co.uk on incorporation before a family investment company is put in place.

No. The restriction on mortgage interest relief for residential lettings, with its basic-rate credit, applies to individuals, trustees and personal representatives. A company deducts its finance costs under the corporate loan relationship rules instead. That is one reason landlords with highly geared residential portfolios look at companies. It does not make a company the right answer on its own, because the other costs of moving property in and taking money out still count.

No. From 6 April 2027, individuals' property income is taxed at 22%, 42% and 47%. These new rates apply to income tax, not corporation tax, so a company's rental profit continues to be charged at the corporation tax rates. The change makes a company comparatively more attractive for landlords who would otherwise pay these rates, though it must be weighed against what you pay to move properties in and to take profits out.

No, not where the company mainly holds or lets property. Shares are not relevant business property if the business consists wholly or mainly of dealing in land or buildings or of making or holding investments. The £2.5m allowance for business and agricultural property from 6 April 2026 applies only where relief is available. Inheritance tax planning for property investors therefore relies on gifts and growth shares, not on Business Relief.

When an individual dies, the assets they own are revalued to market value for capital gains tax, wiping out the gain. That uplift does not extend to assets held inside a company: the company keeps its original base cost, though the shares themselves are uplifted. A property family investment company can therefore face tax on the growth if it later sells, which is a real cost to weigh against the inheritance tax saved.

It can. The annual charge applies to UK dwellings worth over £500,000 that a company holds, with bands rising to £303,450 a year for property over £20m from 1 April 2026. Relief is available for a property rental business, but it must be claimed on a return by 30 April each year. A family investment company letting expensive homes to unconnected tenants will usually qualify for relief, but still has to claim it.

It may be possible. Interest relief on a personal loan to buy shares in, or lend to, a close company is not available where the company is a close investment-holding company. A property family investment company letting commercially is not one, so relief may be available where the company lets property commercially, subject to the material interest conditions and the cap on income tax reliefs. The rules are technical, so we check each case before any borrowing is arranged.

Often, yes. Buying new properties through the company avoids the capital gains tax and the connected-party stamp duty charge that arise when you transfer existing ones, because you are not the seller. The company still pays stamp duty land tax on its own purchases at the rates for companies. Many families therefore keep existing property where it is and direct new investment into the family investment company, with funds lent or subscribed.

You could, but a gift of property to an adult child is a disposal at market value for capital gains tax, and you can lose control of it. It is a potentially exempt transfer for inheritance tax, so it falls out of the estate after seven years. A family investment company is different because you can keep the votes and decide when profits are paid, while the growth builds up for the children. Neither is always right.

The company pays corporation tax on the gain, not capital gains tax: 25% if it is a close investment-holding company, or 19% to 25% depending on its profits and associated companies. There is no annual exempt amount for companies, and no indexation allowance for growth after 2017. Individuals pay 18% or 24% with a £3,000 annual exempt amount, so the comparison depends on the gain and on how you plan to take the money out.

Through dividends on their shares, declared on separate share classes so the company can pay different amounts to different people. Adult children are taxed on dividends as their own income and can use their own allowances. For a minor child with shares from a parent, dividends above £100 a year are taxed on the parent. Many families therefore reinvest profits in the company and let the growth build for the children.

Sometimes, but only where a genuine partnership exists, and it is risky. On a transfer from a partnership to a connected company, stamp duty land tax is charged on market value less the connected partners' share. Joint ownership alone does not create a partnership, withdrawals within three years can be chargeable, and the general anti-avoidance rule applies to pre-planned steps. We would only discuss it after reviewing the facts of how the business is run.

Each class can differ on three things: votes, dividends and capital. A class might have full votes and a limited dividend, no votes but a discretionary dividend, or a right to growth above a set value. The rights are written into the articles of association, which are binding on the company. Company law gives wide freedom, and there is no special tax regime for share classes, so the tax result depends on the drafting.

Alphabet shares are separate classes of otherwise similar shares, often called A, B, C and D. Because each class is separate, the directors can declare a dividend on one class and not on the others. That lets the company direct income to the family member or trust best placed to receive it, and retain the rest. It is our preferred way to direct dividends, because it avoids the dividend waivers HMRC can challenge.

A waiver is a shareholder giving up a dividend so that others can be paid more, and HMRC can challenge it as a settlement, taxing the income on the person who gave it up. Alphabet shares achieve the same result more cleanly, because each class has its own dividend right in the articles and the directors declare dividends class by class. The company must still act lawfully and each class needs real rights.

Yes, if the articles say so and the company has enough distributable profits. That is the purpose of alphabet shares. The directors still owe duties to the company, must follow the articles, and should record each decision. They should also think about fairness between family members and about the tax position of each recipient. A shareholders' agreement can set out how the directors are expected to exercise the discretion.

It is risky. HMRC treats shares that are wholly or substantially a right to income, for example non-voting shares with no capital rights, as a settlement that the giver keeps taxing. The Young v Pearce line of cases went against the taxpayer, whereas in Jones v Garnett shares carrying capital rights did not fail. To be safe, each class should carry real capital rights as well as a dividend entitlement.

As many as the family needs and no more. A simple company may have one voting class for the parents and one or two classes for the children. A blended company may add a class for each child and one for a trust, with freezer shares for the older generation. Every extra class adds drafting, valuation and administration, so we start from what the family wants to do and build only the classes that serve it.

Usually not. Non-voting shares let the parents keep control while the children take the growth and dividends, and they reduce the risk of family disputes over decisions. The children's shares can still carry limited rights, for example to a say in changes to their own class. Which family member holds the votes varies, and while the parents usually do, we decide with the family. Voting rights are set in the articles.

Yes. Capital rights can differ widely between classes. Freezer shares might be entitled only to a fixed sum on a sale or winding up, while growth shares take everything above it, and a child's class might share in growth only above a set hurdle. Capital rights also drive valuation, because shares that take the future growth are worth more than shares with a fixed entitlement. The differences must be clear and consistent in the articles.

Nothing automatically. If the articles make dividends discretionary, the directors can leave a class unpaid for years, and its capital value still grows with the company, so the holder benefits when shares are sold or the company is wound up. The risk is family tension if a child expects income, and tax rules still look at the arrangement as a whole. A letter of wishes and a clear dividend policy can manage expectations.

Yes, but the outright gift exception is conditional. Income from shares given to a spouse is taxed on the giver unless the gift is outright, carries the whole of the income, and is not wholly or substantially a right to income. Jones v Garnett, the Arctic Systems case, helped where the shares carried capital rights. A spouse's shares are also aggregated with yours for inheritance tax valuation, so the design should consider both.

In general the shareholders approve changes to the articles by special resolution, which needs 75% of the votes cast, the directors need authority to allot new shares, and changes to existing class rights may need the consent of that class. Because the parents usually hold the votes, they control the process, but the articles and any shareholders' agreement can give other shareholders a say. We check the approvals needed before any new class is issued.

New share issues must be notified to Companies House with a statement of capital showing the classes and their rights, and the company's register of members must be updated. A gift of shares for no consideration does not usually attract stamp duty, though the transfer form should carry the correct certificate. Changes affecting people with significant control are reported within 14 days. We keep the registers up to date as part of the work.

Yes, but with care. Issuing new shares or a new class is straightforward if the articles and approvals allow it. Altering the rights of existing shares is different: in a close company it is treated as a disposition for inheritance tax and cannot be a potentially exempt transfer, and it can be a value shift for capital gains tax. For that reason we plan the classes carefully at the outset.

Yes. Each class is valued on its own rights, on a hypothetical open-market sale between a willing buyer and seller. A class with votes, a class with a discretionary dividend, and a growth class with only hope value above a hurdle will each be worth different amounts. There is no fixed discount for minority holdings. Our team prepares the valuation in-house when shares are created or gifted, and HMRC may examine it.

Yes. The articles can give a class a fixed or capped dividend, for example for the parents' freezer shares, so they receive a set return and nothing more. A fixed dividend is easy to understand, but if shares are given away with only an income right and no real capital entitlement, the settlements rules can tax the income on the giver. We consider the fixed return alongside the capital rights and the effect on value.

Yes, if the class carries a dividend right. Parents holding the voting or freezer class can be paid when they need income and the company has distributable profits, taxed at dividend rates on them. It is income the company could have reinvested, so the amount is a planning choice. Dividends on shares they have not given away are not a reservation of benefit; benefits taken from shares they have gifted can be. Loan repayments are usually the first source of tax-free cash.

No. A, B, C and D are labels. What matters is the rights written into the articles for each class. Two classes called A and B could carry the same rights or very different ones, and the name has no effect on tax. Families commonly use letters for convenience, though some name classes after the family members or generations. Whatever labels are chosen, the articles must set out clearly what each class is entitled to.

A gift into a discretionary trust is a chargeable transfer, taxed at 20% on the excess over the available nil-rate band, with further ten-yearly and exit charges. A family investment company has no ten-yearly or exit charges, and a gift of shares to an individual is a potentially exempt transfer. The company's shares do remain in each shareholder's estate. The right choice depends on how much you give, to whom and how flexible you need to be.

Not if you lend the money. A loan is not a gift. If you give cash to adult children who then subscribe for shares, that is a potentially exempt transfer, with no entry charge. A cash gift made directly to the company is different: it is not a potentially exempt transfer and is an immediately chargeable transfer, so the 20% rate can apply above the nil-rate band. How the company is funded therefore matters a great deal.

The maximum is 6% of the value of the relevant property at each ten-year anniversary. It is three-tenths of the effective rate on a notional transfer, calculated at the 20% lifetime rate, so the actual rate is lower where the nil-rate band covers part of the value. A trust holding successful growth shares can face charges on the grown value, so a low value at the start does not cap later charges.

A discretionary trust. The trustees choose who benefits and when, and the beneficiaries can be defined as a class that includes people not yet born. Shares in a company belong to named individuals, and changing who owns what means gifting or transferring shares. A family investment company can build in flexibility through separate share classes, but a trust as a shareholder gives the most. That is why we often combine them.

Broadly, yes. If you fund the company with a loan, it can repay the loan to you over time, and repayments are not taxed as income because they are your own money returning. If you gift cash or shares to a trust, you generally cannot take it back, and a trust that lets you benefit can mean the gift stays in your estate. The trust deed normally excludes the person who set it up.

A discretionary trust pays income tax at 39.35% on dividends and 45% on other income, with a £500 de minimis. A family investment company pays corporation tax, usually 25% on interest and gains, and most dividends it receives are exempt. A company is typically cheaper for reinvesting, but the shareholders are taxed when dividends are paid out. A trust holding company shares pays tax on the dividends it receives.

Holdover relief is available for a gift of shares into a discretionary trust, because it is a chargeable transfer, but not where the trust can benefit you, your spouse or your minor children. Business gift holdover is not available on shares in an investment company, so a gift of those shares to an individual normally triggers a gain at market value. Giving shares early, before they have grown, keeps the gain small.

Neither is fully private. A limited company files accounts at Companies House, where they are public, and people with significant control are on the public register. A trust holding company shares must register with the Trust Registration Service. An unlimited company can avoid filing accounts, subject to conditions and with unlimited liability for its members. If privacy matters, it should be discussed at the outset, before the structure is chosen.

Yes. A person who acts as a trustee and votes the trust's shares is not in itself making a gift with reservation, provided any pay is not excessive and the votes are used in the beneficiaries' interests. What matters is that the settlor and their spouse are irrevocably excluded from benefiting. If they can benefit, even in theory, the gift can remain in the settlor's estate for inheritance tax.

Not safely. If you are, or could be added as, a beneficiary, the gift is a gift with reservation and stays in your estate, on top of the chargeable transfer. The trust's income can also be taxed on you. Capital gains holdover is lost if you, your spouse or your minor children can benefit. A well-drafted discretionary trust therefore excludes you, your spouse and your minor children from benefit.

Because each covers the other's weakness. The company gives parents control through voting and freezer shares, flexible dividends through alphabet shares and no ten-yearly charge on most of the value. The trust holds growth shares for children and future generations, adds flexibility over who benefits and when, and can help protect shares from leaving the family. Using both lets each do what it does best.

It can still make sense, but you should weigh the cost. Above the nil-rate band, a transfer into a discretionary trust is charged at 20%. A couple can each use their available nil-rate band, but any other chargeable transfers in the previous seven years reduce it. Alternatively, if the children are adults, a gift of shares to them is a potentially exempt transfer. The right route depends on your priorities and how far you trust the next generation.

No. The shares are relevant property in the trust, so the ten-yearly charge applies to their value at each anniversary, up to 6%. What helps is that the growth shares were issued at a low value, so entry and early exit charges can be nil or very small, provided the settlor made no other chargeable transfers in the previous seven years. A family investment company that is owned by individuals directly has no ten-yearly charge, which is why the balance between trust and individual holdings is a design question.

Generally not. A beneficiary of a discretionary trust has no right to the capital or income, so it is not counted in their estate on death. The trust itself faces the ten-yearly and exit charges instead. Shares held directly by a child do form part of the child's estate. Which is better depends on the family's plans, the sums involved and whether the next generation would prefer certainty or flexibility.

Both need properly drafted documents. For a trust, that is a trust deed. For a company, it is articles of association with the share classes and, normally, a shareholders' agreement and a loan agreement. Our in-house legal team can draft the trust deed, articles and shareholders' agreement, or we work with your own solicitor, whichever you prefer. In both cases, the tax design comes first and the documents follow.

Neither is better by size alone. Larger estates often use both, because the nil-rate band covers little of a big gift and growth shares can be settled at a low starting value. We work with families from about £1m to £50m, and the answer turns on the family's aims, the assets and the age of the children. The honest answer can be a blend, a trust only or no new structure at all.

A freezer share is held by the older generation and has its capital entitlement fixed, broadly at the company's value when the share is created. It often carries votes and limited or discretionary dividend rights. Because its value does not follow the investments up, the holder's estate is broadly fixed at that figure. There is no tax statute defining freezer shares: the effect comes entirely from the rights written into the articles of association.

A growth share takes the company's value above a set figure, called the hurdle, usually the value at the time the freezer shares are fixed. Below the hurdle, the growth share has little or no entitlement, so it participates only in future growth. The hurdle is set in the articles. A higher hurdle makes the growth share cheaper to subscribe for, and more of the future gain goes to its holder.

The parents' freezer shares are entitled to a fixed capital sum, so as the investments rise, the extra value belongs to the growth shares. The parents' estate still contains their freezer shares at their fixed value, plus any loan they made to the company, but it does not contain the growth. The saving depends on the investments growing and on the parents surviving long enough for any gifts of shares to drop out.

On a hypothetical open-market sale between a willing buyer and seller. Growth shares issued with a hurdle at or above the company's current value have mainly hope value, the prospect of future growth, which is usually low but not nil, and depends on the rights, the hurdle and the investment plan. HMRC's Shares and Assets Valuation team can examine the figure and no fixed discount applies, so the valuation must be supportable. Our team prepares it in-house when shares are created or gifted.

Altering the rights of existing shares in a close company is treated as a disposition by the shareholders for inheritance tax, and it cannot be a potentially exempt transfer. For capital gains tax, value passing from the old shares to the new class can be a value-shifting disposal. Issuing new growth shares at market value from the start avoids both problems. We usually start from a blank piece of paper for exactly this reason.

It is possible, with care, but it needs advice before anything is signed. Changing share rights can be a transfer of value for inheritance tax under section 98 and a value shift for capital gains tax. Whether it is worth the risk depends on the values, who holds the shares and how the rights change. A new company set up with the right classes from day one is often simpler.

Usually, but not always. In most families the parents hold the votes through their freezer shares so they decide on investments and dividends. In others the votes are split or held in another class. Control through the votes is not itself usually treated as a reservation of benefit in gifted shares, but it needs careful design and should be agreed with the family and in the articles.

They can, but this is a design choice. The articles might give them a limited or discretionary dividend right, or none. If the freezer shares carry large dividends, the parents are taking income that could have gone to the growth shares, which may be what they want or may defeat the purpose. Where the parents need income, loan repayments are usually the first source because they are not taxed as income.

Preference shares are an ordinary company law concept, usually carrying a fixed dividend with priority over other shares. Freezer shares are a planning term, and what they fix is the capital entitlement, broadly at today's value, so the holder's estate stops growing. A freezer share might also carry a fixed or limited dividend, but it does not have to. The label does not matter in law: only the rights in the articles do.

Control alone is not usually treated as one, provided the parents take no benefit from the shares they have given away. But the risk is real and must be managed. HMRC's examples treat a gift made on condition that the donor becomes a paid director with benefits, or a retained option to buy the shares back, as a reservation. Arm's-length directors' fees for genuine work are usually fine. We advise on this before any shares are gifted.

The freezer shares' fixed capital entitlement is only worth that much if the company's assets can pay it, and the growth shares sit below it, so the growth shares can end up worth nothing. That is the risk the children's side takes, and it is why the growth shares are valued low at issue. The parents' estate is not reduced by the fall, and the structure is no better than the investment returns.

Yes. A gift of freezer shares to an adult is a potentially exempt transfer, free of inheritance tax after seven years, and a disposal at market value for capital gains tax. The shares have a fixed entitlement, so their value should not rise much, but giving them away also gives up the votes if they carry them. Many parents keep freezer shares for life and deal with them in their wills.

The parents' shares are acquired by their personal representatives at market value with no capital gains tax, which is the uplift on death. There is no such uplift for assets held inside the company, so the company keeps its original base cost and a later sale by the company is taxed on the whole gain. That is one of the trade-offs of holding investments in a company rather than personally.

Yes. It is a common variation of the structure, and it moves value across two generations. The grandparents' estate is frozen, the parents hold growth shares, and a trust may hold more for the grandchildren. Gifts of growth shares from grandparents to minor grandchildren are generally outside the parental settlements rule, though reciprocal arrangements are caught. Each generation's position should be reviewed.

HMRC can open an enquiry and its Shares and Assets Valuation team can propose a different figure, which could create an inheritance tax or capital gains tax liability on the gift. A well-prepared valuation, with a reasoned basis, reduces the risk. We do not treat it as a clearance from HMRC. We recommend that families keep the valuation papers with their records.

There is no fixed figure, as it depends on the hurdle, how long you invest, the returns and the costs of running the company. Growth shares only gain value once the company's value passes the hurdle, so the benefit is greater with longer periods and higher returns. Our inheritance tax calculator and growth chart show a rough illustration, and we model your own numbers on the first call.

A loan stays the parents' money: the company owes it back and can repay it, tax-free as capital, whenever the agreement allows. The loan remains in the parents' estate until repaid or given away. Share capital is money the parents have swapped for shares, so getting it back means selling or redeeming those shares. Most family investment companies use a small amount of share capital and a larger loan.

No. A loan can be interest-free, and repaying the principal is not taxed as income. If interest is charged, it is a deduction for the company and taxable income for the lender, and the company deducts basic-rate income tax at 20% and accounts for it on form CT61 each quarter. Whether the CT61 rate moves when the savings rate rises to 22% from 6 April 2027 is not yet confirmed.

Yes, but the tax result depends on how. Waiving a loan owed by the company is a gratuitous transfer into a company, which is an immediately chargeable transfer rather than a potentially exempt one, to the extent it reduces the donor's estate. Assigning part of the loan to an adult child is a gift to an individual. The route needs advice before anything is signed, because the wrong step can create an unexpected lifetime charge.

The loan is an asset in the parent's estate, a debt owed to them, and normally counts at its value for inheritance tax until repaid or given away. The executors can leave it in place, call it in, or deal with it as the will directs. The company needs the cash or liquid investments to repay it, so we plan the loan terms, the wills and the investments together.

Yes. The parents might lend and subscribe for freezer shares, while an adult child subscribes for growth shares with their own savings or inherited money. Each subscribes at market value for their class, and each person's money stays identifiable. Where a parent gave the child the cash, the gift is a potentially exempt transfer if the child is an adult. For a child under 18, gifts from a parent raise the settlements issue, so the source of funds should be recorded.

Either can work, and the choice depends on how much the family wants out of the estate and when. Each gift of shares to an individual starts its own seven-year clock, so staged gifts spread the risk and can make use of annual exemptions. Staging means later shares may be worth more, which raises the value of each later gift. A loan can go in at once, because it is repaid rather than given away.

A little. Share capital and loan principal are not taxed in the company, and repayments are not deductible. If the company pays interest on a loan, it is a deduction in the company's non-trading loan relationships, set against the interest it receives. The main rules for the company, such as 25% on a close investment-holding company's profits, do not change with the funding route.

No. A private limited company has no statutory minimum share capital, so the shares can be issued for a modest sum and the rest of the funding is usually a loan. A small amount of share capital with a larger loan keeps the parents' access to their money through tax-free repayments. The price and class structure still need care, because the value at issue sets the starting point for later gifts and the growth shares' hurdle.

You can, but it is a disposal at market value for capital gains tax, even if no or low consideration is paid, because the company is connected to you. Any gain is taxed at 18% or 24% at your own rates. That cost is why many families fund with cash, or move assets in only when the gain is small. Stamp duty can also arise, depending on the asset and the consideration.

Property can be moved in, but moving it is a disposal at market value, with capital gains tax for you and stamp duty land tax for the company at the higher company rates. It is often moved in after a prior property incorporation, where the right conditions are met, and sometimes the family uses cash and buys new property through the company instead. Our sister firm Property Tax Advisory advises on that first step before the property goes in.

You can, but interest relief is usually not available. Income tax relief for interest on a loan used to buy shares in, or lend to, a close company is denied where the company is a close investment-holding company, which a portfolio family investment company normally is. A property-letting company that is not a close investment-holding company may qualify where it lets property commercially, subject to the material interest conditions and the cap on income tax reliefs. Take advice before borrowing for this purpose.

Yes. Parents can top up the loan at any time, or the company can issue more shares, subject to the articles and the shareholders' agreement. Additional loans stay in the parents' estates like the original. New shares for the children are issued at market value, with any gift of cash behind them treated as before. We design the documents so that top-ups are simple, and record each one in the board minutes.

We work back from what the family wants. How much access to the capital do the parents need, how much should leave the estate, who will hold the shares, and what assets are already available? A loan keeps access but stays in the estate. Gifted value for shares moves value out but gives up access. Assets add capital gains tax and stamp duty land tax. The mix is case by case.

Yes, and many blended structures do. Each generation can lend and hold their own class of shares, so the loans and any gifts are separate and each person's estate is dealt with on its own terms. Gifts from grandparents to minor grandchildren are generally outside the parental settlements rule, though a parent supplying the money or a reciprocal arrangement can bring it back in. The documents should record who put in what.

Quite flexible, because it is your own money. A loan agreement can make the loan repayable on demand or by instalments, and the company can repay as much or as little as it has available, subject to its cash and the directors' duties. Repayment is not taxed as income. Our loan repayment planner shows how equal tax-free repayments reduce the loan left in your estate over time.

At least the amount, whether interest is charged and at what rate, when and how the loan is repayable, what happens on the lender's death or the company's insolvency, and whether the loan is secured. It should be signed before the company invests the money, and the board should minute each repayment. The agreement needs to be consistent with the articles and the rest of the plan, so we agree it with the solicitor.

It depends on the amounts, the growth and how long the parents live. The saving is mainly 40% of the growth that builds up in shares held by the children or a trust, once any gift of those shares has survived seven years. It does not remove tax on the original money if you lend it. Our inheritance tax calculator gives a first estimate, and a Chartered Tax Adviser can model your own figures on a free call.

A loan is not a gift. It is a debt the company owes you, and it remains something you own until it is repaid or you give it away. That is why a loan-funded company does not cut tax on the original capital. What it does is stop future growth from adding to your estate, because the growth belongs to the shareholders. You can also repay the loan to yourself over time, tax-free.

A gift with reservation is one where you keep a benefit from what you gave away, so for inheritance tax it is treated as still yours. Keeping the voting shares or acting as director is not of itself a reservation, but benefits connected to the gift can be: for example a new salaried role as a condition of the gift, or a right to buy the shares back. It is a risk to manage with advice.

Arm's-length directors' fees for real work are usually fine, and continuing pre-existing commercial pay is not normally treated as a reservation of benefit. The risk is pay that is really a way of taking benefit from the gifted shares, such as a role created as a condition of the gift. The fee should reflect the work done and be set before shares are gifted. We help families document this so that it can be defended.

The people who received the gift may have to pay inheritance tax if more than £325,000 was given away. A potentially exempt transfer that fails uses your nil-rate band first, and only the excess is taxed, with taper relief after three years. Your executors deal with tax on the estate itself. It is worth keeping records of what was given, when, and to whom, so the position can be shown to HMRC.

A potentially exempt transfer must be a gift to another individual, or to a disabled person's or bereaved minor's trust. A company is neither, so a gift of cash to a company is an immediately chargeable transfer, to the extent it reduces your estate. That is why cash is usually given to adult children, who then subscribe for shares, or lent to the company, rather than gifted to it directly.

Altering the share capital or share rights of a close company, for example converting existing shares into freezer and growth classes, is treated for inheritance tax as a disposition by the shareholders, and such a disposition cannot be a potentially exempt transfer. There can also be a capital gains value shift. That is why we normally start from a blank piece of paper and issue new growth shares rather than reshape old ones.

From 6 April 2026, 100% relief applies to the first £2.5m of combined business and agricultural property per person, with 50% above that, and unused allowance can pass to a spouse. It matters only if the family investment company is mainly a holding company of trading businesses. Shares in a company that mainly holds investments or property do not qualify, whatever the allowance.

It can. Shares held by a spouse or civil partner are treated as related property and aggregated with yours when valuing each holding. Each spouse's shares are valued as a proportionate part of the combined holding, so two 30% holdings may be valued as shares in a 60% holding rather than as minorities. That can push the value of the parents' shares up, which is worth knowing before any gift is planned.

It can. A transfer of value by a close company, such as the company making a gift or selling something for less than its worth, is apportioned among its shareholders as if they had made it. A family investment company should therefore not give assets away or deal with family members below market value without advice. Normal investment activity is not affected.

They change the numbers for many families. For deaths on or after 6 April 2027, most unused pension funds and death benefits will count towards the estate for inheritance tax, with personal representatives responsible for reporting and paying. More families may therefore find their estates are above the nil-rate band than before. Whether a family investment company is the answer depends on how much you have outside the pension and what you want to do with it.

The nil-rate band is £325,000 and the residence nil-rate band is £175,000 where a home passes to direct descendants, reduced by £1 for every £2 above £2m. Unused amounts can pass to a spouse or civil partner. Both are frozen until 5 April 2031. The standard rate is 40%, or 36% if 10% or more of the net estate goes to charity.

They can, once the gift is outside your estate, which for a gift of shares to an individual means after seven years. The residence nil-rate band reduces by £1 for every £2 by which the estate exceeds £2m, so moving value out of the estate can help preserve it. The loan and any shares you keep remain in the estate, so the effect depends on how the company is funded and who holds what.

Shares left in a will remain in the estate and attract inheritance tax at 40% above the nil-rate band, though the shares are revalued at death for capital gains tax. A lifetime gift can fall outside the estate after seven years, but it is a disposal at market value for capital gains tax. There is no uplift for assets inside the company. Gifting early, when values are low, tends to keep the cost down.

Yes. Since 6 April 2025, inheritance tax depends on residence rather than domicile. A person who has been UK resident for at least 10 of the previous 20 tax years is a long-term UK resident and their worldwide assets are in scope, with a tail of between three and ten years after leaving. An overseas company wrapper does not take UK residential property out of the charge.

Sometimes, but the route differs. For a trading business, Business Relief may already cover the shares, and moving it into an investment company could lose it, so we check first. For property, a family investment company can take future growth outside the estate, but the move into the company has capital gains tax and stamp duty land tax costs. The best answer for each asset can be different.

It depends on who owns the shares and what the court decides. A court dealing with a divorce looks at the couple's financial resources, and that can include shares a child owns directly. Shares held through a discretionary trust belong to the trustees, so the child has no fixed entitlement, but the court can still take trust and company interests into account. Good structuring helps reduce the risk. It cannot guarantee an outcome.

Shares a child owns outright can form part of what a trustee in bankruptcy deals with. Shares held by a discretionary trust are not the child's property, and articles can require a bankrupt shareholder's shares to be offered back to the family at a valuation. Insolvency rules have their own reach, though, so these tools help reduce the risk rather than remove it. We design them around each child's circumstances.

It is a clause in the company's articles saying that if a defined event happens to a shareholder, such as divorce, bankruptcy or death, their shares must be offered to the company, the trust or other family shareholders. The price is set by a stated valuation method. The aim is to keep shares inside the family. Drafting matters, because the trigger events, the price and the timing all need to work in practice.

Pre-emption rights mean a shareholder who wants to sell or transfer shares must first offer them to the existing shareholders, usually at a fair value, before anyone outside the family can buy. Combined with a ban on transfers to outsiders without board consent, they make it difficult for shares to leave the family by sale or gift. They sit in the articles and are usually repeated in the shareholders' agreement.

They can help. A holder of non-voting growth shares has no say in running the company, so a former spouse or a creditor stepping into their shoes gains no influence over the family's investments. The parents, usually holding the voting shares, keep control. Non-voting shares do not stop a court or an insolvency practitioner placing a value on the shares, so they work best alongside the other tools.

A court is not bound by the legal form of a structure. In a divorce it can take into account interests in trusts and companies when deciding what resources a person has, and it can look at how realistic it is that a trustee would pay money to them. That is why we say the structure helps protect wealth, and why the paperwork, the family's conduct and the timing all matter.

In a discretionary trust the trustees own the shares and decide who benefits, so no beneficiary has a fixed right to the shares or their growth. That can reduce what a divorcing spouse or a creditor can reach. It also keeps the shares from passing automatically outside the family. The trade-offs are inheritance tax charges on the trust and extra administration, which we explain in our trust page.

Where a child owns shares or receives money from the structure, a pre-nuptial or post-nuptial agreement is worth discussing. In England and Wales such an agreement is not automatically binding, but a court can give it weight, particularly if both sides took independent legal advice and disclosed their finances. We encourage the conversation early. A family lawyer should advise on the agreement itself, and the rules differ in Scotland.

The articles are a public document that sets the basic rules of the company. A shareholders' agreement is a private contract between the shareholders and can go further: how decisions are made, when a shareholder must sell, how the price is set, what happens on a family dispute, and what the family expects of each other. Contract terms can also be updated more easily as the family changes.

Several tools work together. The articles can require shares of a deceased shareholder to be offered to the family or the trust at a stated value. Shares held in the discretionary trust do not pass under a will at all. Each family shareholder should also have a will consistent with the structure. Without these, shares can pass under the intestacy rules or a will to a person the family did not intend.

Normally only on the family's terms. The articles usually prohibit sales to outsiders and require shares to be offered first to other family shareholders, the trust or the company. A child who wants to leave the structure typically sells back at a valuation defined in advance. How much freedom a child has is a decision we make with the parents when we design the share classes.

That depends on the articles and the child's will. We can draft the articles so that shares are offered to the trust, the parents or the child's own children at a defined value, rather than passing automatically to a spouse or someone outside the family. The child's estate may still have inheritance tax and capital gains tax points on the shares. We normally review the structure with the family's solicitor.

It can. A lifetime gift into a discretionary trust is a chargeable transfer. Above the available nil-rate band it is charged at up to 20%, and tax of up to 6% can arise at each ten-year anniversary and on exits. Gifts of shares to individuals are potentially exempt transfers with no entry charge. We weigh that cost against the protection the trust provides, case by case.

Usually not. If the person who set up the trust can benefit from it, or could later be added, the gift can be a gift with reservation and stay in their estate for inheritance tax. For the trust to work, the person setting it up, and normally their spouse and minor children, should be excluded from benefit. Parents can still hold the voting shares and act as directors, which does not by itself reserve a benefit.

They can affect the value, because unquoted shares are valued on a hypothetical sale between a willing buyer and seller, taking account of the rights and restrictions attached to them. HMRC values each case on its facts and there is no fixed discount. We therefore treat restrictions as a protection tool and not a tax tool, and our team prepares the valuation when shares are created or gifted.

Often yes, by changing the articles and putting a shareholders' agreement in place, which usually needs the agreement of the shareholders. Care is needed if the changes alter the rights attached to shares, because altering the share rights of a close company can be treated as a transfer of value for inheritance tax and a value shift for capital gains tax. Take advice before any change to the share rights.

It cannot guarantee protection from a divorce settlement, a bankruptcy, a dispute among the family or a challenge by HMRC, and it does not remove the parents' own risks while they hold shares or a loan account. It will not stop a court looking at the whole picture. The aim is to reduce the risk and make the family's wishes clear in the documents.

Usually the parents who funded it, because directors decide on dividends, loan repayments and investments. Some families add an adult child, or an independent professional, to share the workload and prepare the next generation. A company needs at least one director who is a real person. Directors owe duties to the company, not only to the family, so we talk through the choice with you and record the reasoning.

There is no set number, but a sensible rhythm is a short meeting at least once a year to approve the accounts, review investments and decide on any dividends, with extra meetings when something significant happens. Written resolutions can replace meetings where the directors agree. What matters is that decisions are properly made and recorded, because the paper trail supports both the tax position and the family's protections.

Typically: approving the annual accounts, reviewing the investment strategy, deciding whether to declare dividends and on which share classes, deciding whether to repay part of any shareholder loan, and checking the company's filings are up to date. The board also considers any change in the family, such as a new grandchild or a divorce, and whether the articles or shareholders' agreement need to change.

As a UK company, it must keep statutory registers, including members, directors and people with significant control, and minutes or written resolutions of decisions. It should also keep a clear record of the loans from shareholders and any repayments, plus investment and bank records. Good records matter for the accounts and tax return, and they show the company is genuinely run as the documents say.

The register of people with significant control (PSC) lists individuals who own more than 25% of the shares or voting rights, can appoint or remove most of the directors, or have significant influence or control. Where a trust meets a condition, its trustees are recorded. Shareholdings appear in bands. In a family investment company the parents holding voting shares and the trustees of a family trust are often on it.

Changes to PSC information must be reported to Companies House within 14 days. That includes a new person meeting a condition, someone ceasing to, or a change in details. In a family company this is easy to miss after gifting shares or appointing a new director, so we include the filings in the set-up and in the steps for any later change in share ownership.

Yes. Since 18 November 2025 new directors and people with significant control must verify their identity with Companies House. Existing directors confirm verification when they file their next confirmation statement, within a 12-month transition period. Check the current Companies House guidance before filing, because the process and deadlines are still being rolled out and may be updated.

A confirmation statement is the company's regular check-in with Companies House, confirming that the details held on the register, such as directors, shareholders, registered office and PSC information, are correct. A family investment company, as a normal company, must file one. Missing it leads to penalties and can lead to the company being struck off. We list the dates in a compliance calendar for the family and the accountant.

For a limited company, yes. The accounts filed at Companies House can be read by anyone, although small companies can currently file abridged accounts and leave out the profit and loss account. Only an unlimited company that meets strict conditions avoids filing its accounts. If privacy matters, speak to us about the options and the trade-off.

From 1 April 2028, small companies and micro-entities will have to file their profit and loss account and abridged accounts will be abolished. Companies can opt out of publication, though the process is still to be confirmed. All accounts must be filed in iXBRL format using commercial software. These are announced changes, so we review them as the details are published.

In practice, yes. The company must prepare statutory accounts, file a corporation tax return and make Companies House filings, and most families want an accountant to handle that. We design the structure and the tax plan, and your accountant, or one we can suggest, deals with the annual compliance. We work with your existing accountant and keep them informed so everyone follows the same plan.

A discretionary trust is an express trust, and UK express trusts must be registered on the Trust Registration Service even if there is no tax to pay, unless an exclusion applies. A taxable trust registers within 90 days of becoming liable to tax, and a non-taxable trust within 90 days of creation. Changes must be kept up to date. Trustees are responsible for the registration and updates.

Only for genuine work. A fee that reflects real services at a commercial level can be deducted as a management expense, but employer National Insurance can apply, and a fee that is really a disguised payout of the shares' growth invites questions. Retained control and benefits taken from gifted shares also need care. We advise on this case by case, and we would rather see no fee than a weak one.

It is possible but needs care. If a close company lends to a shareholder, the company pays a tax charge of 35.75% on loans made on or after 6 April 2026, repayable when the loan is repaid, and there can be other tax consequences. The loan should be documented and kept on proper terms. Money flowing back to the parents may also affect the inheritance tax analysis.

The directors resolve to pay a dividend on a named class of shares, using the company's profits that are available for distribution, and record it in minutes with dividend vouchers. Where the company has alphabet shares, each class can receive a different dividend, so the family can direct income. We prefer separate share classes to dividend waivers, which HMRC can challenge as a settlement.

A family meeting is a regular, informal gathering where the parents explain what the company is for and listen to the children's views. A family charter is a written version: what the family wants the wealth to do, how decisions are made, and how disagreements are handled. It is not a legal document, but it supports the shareholders' agreement and helps the next generation to take part.

The company should plan for it. Lasting powers of attorney for the directors, and articles that allow other directors to be appointed, mean the company can keep operating if a parent loses capacity or dies. Without planning, decisions can stall and families can find themselves in a dispute at a bad time. We cover this in the articles and the shareholders' agreement.

At least every year or two, and whenever something changes: a birth, a marriage or divorce, a death, a large gift, a move abroad, a sale of the business or a change in the law. The review covers the share classes, the loan account, the investments, the trust and the filings. We offer ongoing support so that your family investment company does not drift away from its original design.

Design first, then documents, then money, then gifts. The share classes, any trust and the funding plan are agreed before the company is formed. The company is registered, the articles and any loan agreement are signed, and the parents fund it. Shares are gifted or issued only after that. Gifting shares before the funding and documents are in place can create avoidable tax, so the order of the steps is part of the advice.

At a minimum: articles of association setting out the share classes and their rights, a record of the shares issued, and a loan agreement if the parents are lending. Most families also have a shareholders' agreement, board minutes, and a trust deed if a trust is a shareholder. Together they say who controls the company, who receives dividends, what happens if a shareholder divorces, dies or becomes bankrupt, and how money comes back out.

Almost anyone: parents, grandparents, adult children, a spouse or civil partner, and trustees of a family trust. Minor children can hold shares, though the tax rules on gifts from a parent need care. A private company needs at least one director who is a real person, and directors owe duties to the company under company law. Many families appoint the parents and, later, a trusted adult child.

Usually the parents. They subscribe for the first shares, typically the voting or freezer class, and lend the company most of the money. Growth shares for the children and any trust are then issued or gifted as the plan sets out, ideally while the company's value is low. Having the founders hold the first shares keeps control with them and gives a clean starting point for valuing every later issue and gift.

No. There is no special tax regime for family investment companies and no approval procedure. The company is formed at Companies House, registers for corporation tax and is taxed under the ordinary company rules. That does not mean HMRC takes no interest: the settlements rules, the gift with reservation rules and the tax treatment of any assets moved in all apply, which is why the design and documents matter.

Sometimes, but we usually start from a new company. An existing company has a history, its own shareholders, reserves and possibly trading activity, and changing its share rights can be treated as a transfer of value for inheritance tax and a value shift for capital gains tax. Converting existing shares into freezer and growth classes is possible with care and advice. A fresh company with the right classes from day one is normally cleaner.

You can form a company yourself, but a pack cannot design the structure for your family. The share classes, who holds the votes, how the children and any trust are treated, and how the company is funded all depend on your wishes and circumstances. Poorly drafted rights can undermine the tax result or the protection you wanted. We start every company from a blank piece of paper for that reason.

The articles set out the share classes and the rights of each: votes, dividends and capital. They carry the restrictions that help keep shares in the family, such as pre-emption rights, a power to refuse a transfer and compulsory transfer on divorce, bankruptcy or death, and they say how directors are appointed and dividends declared. They are public at Companies House, so private matters usually go in a shareholders' agreement.

Yes. A family investment company is not limited to parents and children. The shares can be held by siblings, nieces and nephews, a partner or friends, or by a trust for a wider class of beneficiaries. The parental settlements rule on gifts to minor children is not relevant, but gifts to other people are still potentially exempt transfers, so the seven-year rule matters. We design around the people you want to benefit.

Usually yes, if the articles allow for it and the right approvals are given. New classes can be created and new shares issued, often as growth shares valued when issued. Altering the rights of existing shares is different: in a close company it can count as a disposition for inheritance tax and a value shift for capital gains tax. We plan for future family members at the outset to avoid awkward changes later.

A gift of shares for no consideration does not usually attract stamp duty, and the transfer form is normally not sent to HMRC, though it should record nil consideration with the right certificate. If debt is assumed or released as part of the transfer, that counts as consideration. Sales of shares are charged at 0.5%. Gifts still have inheritance tax and capital gains tax consequences, which are separate from stamp duty.

Yes, partly. A limited company's directors and people with significant control, broadly those with more than 25% of the shares or votes or real control, are recorded at Companies House, and its accounts are filed publicly. Where a trust meets a control condition, its trustees are recorded. An unlimited company meeting certain conditions need not file accounts, which is why some families choose one. We discuss the privacy trade-offs before the company is formed.

It helps to have a plan, though not every account must be open on day one. The company needs a bank account and, usually, an investment platform or manager, and those providers will ask for the company's documents and details of its directors and controllers. Opening them takes time, so we suggest settling the investment approach while the structure is being designed. The investments themselves are for the family and its investment adviser; we advise on the tax.

Usually quoted shares, funds, bonds, cash and sometimes unquoted investments or property. Each is taxed differently inside a company: most dividends received are exempt from corporation tax, while interest, rent and gains are taxed. Some funds, such as bond-heavy funds and non-reporting offshore funds, have special rules. The investment strategy is for the family and its investment adviser, but the tax treatment of what you choose should shape the choice.

Yes, and many do. Both can lend, hold voting shares and act as directors. Gifts between spouses and civil partners living together are generally no gain, no loss for capital gains tax, and shares held by a spouse are aggregated with your own for inheritance tax valuation, which can affect the value of freezer shares. How each spouse is involved is part of the design.

Often, yes. An existing discretionary trust can subscribe for growth shares in a new family investment company, or the trust can be a shareholder alongside the family from the start. Whether the existing trust is suitable depends on who can benefit, whether the settlor is excluded, and its tax position. If it is not suitable, a new trust can be created. This is the kind of combination our blended FIC structure is designed around.

Four stand out. The settlements rules, which can tax dividends on the parent when shares are gifted to a minor child. The gift with reservation rules, which can leave gifted shares in the donor's estate if they keep a benefit. The close investment-holding company rules, which fix the corporation tax rate. And, where property or a trust is involved, capital gains tax, stamp duty land tax and the relevant property regime.

The common ones are gifting shares before the funding and documents are right, using a template that does not fit the family, forgetting the position of a child under 18, moving property in without checking the capital gains tax and stamp duty land tax, and keeping a benefit from gifted shares. Another is leaving the company with no plan for how money comes back out. Early advice avoids most of these.

You are ready when you have a sum you will not need for living costs, a view on who should benefit and when, and a rough idea of how much control and access you want. You do not need the detail worked out. A free first call is the place to test whether a family investment company is worth it for you and what the sensible alternatives are.

We set up family investment companies from around £1m to £50m. At the smaller end the costs have to be weighed against the benefit; at the larger end more complex designs, with trusts, several share classes and funding from a holding company or property, are common. If you are unsure whether your sums justify one, a free call will give you an honest view.

The company opens its bank and investment accounts, the parents advance the loan under the signed agreement, and the shares are issued or gifted in the planned order. The first board meeting is minuted, the statutory registers are kept, and the company registers for corporation tax. Directors and people with significant control complete identity verification at Companies House. It is also sensible to diarise the first annual review.

The settlor is the person who puts cash or shares into the trust, usually a parent or grandparent, and each person who settles uses their own nil-rate band. Trustees are chosen for trust, availability and independence: often a mix of family members and a professional or trusted friend. The settlor can act as a trustee, but must be excluded from benefit. We help families weigh who will still be around and willing in 20 years.

On each tenth anniversary of the trust, inheritance tax is charged on the value of the relevant property in it, at three-tenths of the effective rate calculated at the 20% lifetime rate. The maximum is therefore 6%, and the actual rate is lower where the nil-rate band covers part of the value. Because it uses the value at each anniversary, successful growth shares bear the charge on their grown value.

Inheritance tax is charged when property stops being relevant property, for example when shares are appointed out of the trust. The maximum is 6%. Before the first ten-year anniversary the rate is based on the value of the trust when it started, multiplied by the complete quarters elapsed out of 40, so early exits of low-value growth shares can be nil or very small, provided the settlor made no other chargeable transfers in the previous seven years. There is no exit charge in the first three months.

No. There is no exit charge on payments that are income of the recipient, or on payments of the trust's costs. So when the trustees receive a dividend from the family investment company and pass the income to a beneficiary, there is no inheritance tax exit charge, although income tax matters for both the trust and the beneficiary. Appointing the shares themselves, or capital, to a beneficiary can trigger a charge.

A discretionary trust usually has at least two trustees so that decisions are not made by one person, and three or four is common where family and a professional both serve. The deed says how trustees are appointed, retired and replaced, and may give the settlor or a protector a limited power to do so. The settlor should not be able to appoint themselves as a beneficiary. Trustees' roles are worth revisiting regularly.

If the settlor pays the 20% lifetime inheritance tax on the gift, rather than the trustees, the loss to the settlor's estate includes the tax paid. The net gift is grossed up, so the excess over the nil-rate band is multiplied by 100/80, an effective 25% on the excess, and the grossed-up figure goes into the settlor's seven-year cumulation. If the trustees pay, no grossing up is needed. Gifts within the nil-rate band avoid the question entirely.

The deed names a class of beneficiaries, for example the settlor's children, grandchildren and their spouses, and usually gives the trustees or another person a power to add more. The power must be drafted so that it cannot add the settlor or their spouse or civil partner, otherwise the gift can be one with reservation. Trustees decide which beneficiaries benefit and when. A letter of wishes tells them what you hope for.

The trust continues. The deed sets out how a replacement is appointed, usually by the remaining trustees or by a named person, and the trust's assets, including the shares, are held by the new trustees. The change is recorded on the Trust Registration Service and, where the trustees are people with significant control, reported to Companies House within 14 days. It is sensible to plan succession of trustees in the deed rather than leave it to chance.

They can. A person with significant control is someone with more than 25% of the shares or votes, the power to appoint most directors, or significant influence or control. Where a trust meets one of these conditions, its trustees are recorded as the people with significant control. Changes must be reported within 14 days. Holding growth shares through a trust therefore has a privacy implication to weigh in the design.

Trustees pay capital gains tax at 24% in 2026/27, with an annual exempt amount of £1,500. In practice the trust rarely sells, because the FIC shares are held for the long term and the company, not the trust, usually does the investing. If the trust becomes settlor-interested, tax consequences change, which is another reason the deed excludes the settlor, their spouse or civil partner, and for holdover their minor children.

A letter of wishes is a non-binding note from the settlor to the trustees saying how they hope the trust will be used, for example when to help grandchildren, how to treat different children and what to do if someone is divorced. It does not bind the trustees, but they must consider it. Most discretionary trusts have one, and we recommend families write it with their advisers and review it as circumstances change.

Usually the settlor gives cash to the trust, and the trustees use it to subscribe for newly issued growth shares at market value, which is a low figure at the start if the hurdle is at or above the company's value. What is valued for inheritance tax is the loss to the settlor's estate. Keeping the settled sum and the share value small keeps the entry charge down or nil.

In most cases the company is formed first, or at the same time, so there is something to subscribe for. The trust deed is signed, cash is settled, and the trustees subscribe for growth shares at the outset when the value is lowest. Gifting shares after the company has grown costs more in tax. The exact order depends on the funding and the documents, and we sequence them in the plan.

Usually not. The trust's growth shares are normally non-voting, so the parents keep control through their freezer shares and the trust cannot disrupt decisions. Some families give trustees limited rights over changes that affect the trust's own class. A settlor who acts as a trustee and votes shares in the beneficiaries' interests is not usually treated as a reservation of benefit, but what the settlor gets from the arrangement must be checked.

No. From 2027/28 new 47% property and savings trust rates apply to rent and interest that a trust receives directly. Dividends received from a family investment company are taxed at the dividend trust rate, which is 39.35% for 2026/27, and the rise in the ordinary and upper dividend rates did not change it. This is another reason that holding rental or savings income in the company, not in the trust, can matter.

A trust with net income of £500 or less pays no income tax on it, but above £500 all the income is taxable. Where the same settlor has made other qualifying settlements, the £500 is divided between them, down to a minimum of £100 each with five or more trusts. Settlor-interested trusts taxed on the settlor do not count. For most trusts holding FIC shares, dividends will exceed £500.

It is a family investment company registered as an unlimited company, not a company limited by shares. It works in the same way day to day, with directors, share classes and investments. The difference is that, if the company cannot pay its debts, its members can be called on to contribute without a cap on the amount. In return, it may be able to keep its accounts off the public register.

Privacy. A limited company must file its accounts at Companies House, where anyone can read them. An unlimited company that meets the conditions in section 448 of the Companies Act 2006 does not have to deliver accounts to Companies House, so the size of the family's portfolio is not on public view. Families who value discretion, particularly with larger sums, sometimes find that worth the trade-off.

Not if it meets the section 448 conditions. The directors need not deliver accounts if, at no time in the period, the company was a subsidiary of a limited undertaking, under the joint rights of two or more limited undertakings, or the parent of a limited undertaking. The exemption doesn't apply to banking or insurance companies, or where every member is a limited company.

When it owns, or is owned by, a limited undertaking. If the unlimited company holds shares in a limited trading company and is its parent, the exemption is lost. It is also lost if it is a subsidiary of a limited company, or if every member is a limited company. A family investment company holding a trading subsidiary through a limited company therefore usually can't use it.

If the company were wound up and its assets did not cover its debts, the members could be required to contribute to the shortfall, with no upper limit in the way a limited company's members are limited to the unpaid amount on their shares. In practice a well-run investment company without borrowing rarely reaches that point, but the exposure is real and must be understood before deciding.

Potentially. A trustee who holds shares in an unlimited company is a member, and the liability that comes with membership can fall on the trustees, with a call on the trust fund. This is a real consideration in a blended structure, where a discretionary trust is a shareholder. We would look at it carefully with you and the trustees before recommending an unlimited company.

Not under section 448. An unlimited company that is the parent of a limited undertaking loses the exemption, so it must deliver accounts. Families who want privacy and a trading subsidiary sometimes keep the trading company separate from the investment company, or look at other ways of holding, such as using a trust. We would map the group before suggesting anything.

No. There is no special tax regime for family investment companies, and an unlimited company is taxed under the ordinary company rules. A company mainly holding a portfolio of investments is normally a close investment-holding company, paying corporation tax at 25% on its taxable profits, and most dividends it receives are exempt. The choice between limited and unlimited is about privacy and liability, not tax.

The section 448 exemption is about delivering accounts. It does not switch off the public register. Information such as the company's name, registered office, directors and people with significant control, and the confirmation statement, are still filed. You should assume the register will show who runs it and who controls it. We help you work out exactly what stays public before you decide.

Yes. Not delivering accounts to Companies House is not the same as not preparing them. The company still needs proper accounting records and accounts for its members and for tax purposes, and its corporation tax return goes to HMRC. The saving is public disclosure, not accounting work. Your accountant still has a role in preparing the company's figures.

In some cases a company can re-register as unlimited, but it generally needs the agreement of all its members, and it changes their liability position permanently. Because a trust or a minor may be among the members, it is usually better to decide at the outset. Ask us before assuming it can be done simply.

Yes, because borrowing and property increase the chance of a shortfall, and members stand behind the company's debts. A family investment company that is funded by shareholder loans and holds a diversified portfolio carries less of this risk than one with a mortgage or a guarantee. We usually advise against combining unlimited liability with significant borrowing.

Many do, but some providers are less familiar with them and ask more questions about the members and the liability position. It is worth confirming with the platform, the custodian or the lender before relying on an unlimited company. If the structure is to hold property, a lender is likely to examine who stands behind the company.

Partly. Shares held by trustees mean the individual children are not shareholders in their own name, but information about the trustees and others can still appear on the PSC register, and the trust must be registered on the Trust Registration Service. A limited company with a trust shareholder still files public accounts. Privacy is a spectrum, and we help you decide what level you need.

Sometimes, but the trustees' exposure needs to be understood. In a blended structure a discretionary trust holds shares alongside the family. If the company is unlimited, the trustees are members and could face a call on the trust fund. Many families decide that is not acceptable and stay with a limited company, and accept the public accounts.

It is the main practical reason. There are few other differences in how the company is used. If your concern is that others can read the size of your portfolio, an unlimited company may help. If your concern is protecting wealth from a child's divorce or bankruptcy, the unlimited status doesn't do that, and the extra liability can work against you.

Often not. A company has set-up costs, annual accounts, a tax return and Companies House filings, and these do not shrink in proportion to the money invested. Our family investment companies range from around £1m to £50m. Below that, direct gifts, the usual exemptions or a simple trust may serve you better. We will say so on a free first call and not set up something that does not fit.

Compare the likely inheritance tax saved on future growth with the cost of setting up and running the company, the tax paid inside it, and the cost of getting money out. A FIC works best with a long time horizon and substantial funds that you will not need to spend. We work through this with your figures, and our calculators give a rough first look.

It is a poor fit for regular income. Profits are taxed in the company, and dividends paid out are taxed again on the shareholder. Repaying a shareholder loan is not taxed as income, which helps, but it uses up capital and reduces the saving over time. If you need a substantial income from the money, a FIC is unlikely to be the right place for it.

Because income can be taxed twice. A company mainly holding investments pays 25% on its taxable profits, then an additional-rate taxpayer pays 39.35% on dividends. Combined, that is an effective rate of about 54.5% on profits paid out. That is why FICs suit long-term reinvestment, with growth going to the next generation, and not regular extraction beyond loan repayments.

Think carefully before gifting it. A loan to the company stays yours and can be repaid, but gifts of shares or cash cannot be taken back, and the seven-year inheritance tax clock only starts once you have given something away. Money you may need for care costs, a move or a business should generally stay in your hands. We look at how much you can safely give away.

It may not help much. Gifts of shares to individuals are potentially exempt transfers that fall out of your estate only if you survive seven years, with tapering relief after three. A gift into a discretionary trust is a chargeable transfer, charged at up to 20% above the nil-rate band. If life expectancy is short, other planning, or simply leaving things as they are, may be better.

Yes, and for many people it is the better answer. A gift to an individual is a potentially exempt transfer, free of inheritance tax if you survive seven years, with annual and other exemptions available. The drawbacks are that you lose control and the money is exposed to a child's divorce, creditors or spending. A FIC keeps control with you, at the cost of complexity.

Sometimes. A trust has no company tax layer, but lifetime transfers into a discretionary trust above the nil-rate band are charged at up to 20%, with charges of up to 6% every ten years and on exits. A FIC has no ten-yearly or exit charges but sits in a company tax system. The right answer depends on the size, the assets and your priorities.

Pensions remain tax-efficient while you are alive, but most unused pension funds and death benefits come into the estate for inheritance tax for deaths on or after 6 April 2027. That reduces the old advantage of leaving a pension untouched. A pension and a FIC do different jobs, and the sensible answer is often to use both. Take advice from a regulated financial adviser on the pension itself.

A FIC that mainly holds investments or let property does not qualify for Business Relief. A company that is mainly a holding company of trading companies may qualify, though excepted assets are excluded. From 6 April 2026, 100% relief applies on the first £2.5m of combined business and agricultural property per person, 50% above. If your wealth is in a trading business, that is a different conversation.

Usually not, unless you plan to sell the home. Moving a main residence into a company is complicated and can create tax, and the family would then be using a company's property. A FIC works best with cash, investments or an investment property portfolio. For a home, other planning may help, such as using the residence nil-rate band or gifting in other ways.

It needs some trust and communication, because the structure depends on shareholders and directors working together under shared rules. The shareholders' agreement and articles can manage disagreement but cannot remove it. In a family with open conflict, a simpler structure, or a trustee-led arrangement, may serve better. We discuss family dynamics frankly, because they shape the design.

That is a reason to design it differently, not necessarily to avoid a FIC. Shares can be held by a discretionary trust until the children are ready, the parents can keep the voting shares, and minor children's dividends need care. If you have real doubts about a child's maturity, we can recommend a structure that gives them nothing outright for now.

It can be closed, but unwinding is not free of tax. Selling investments inside the company triggers corporation tax on gains, and distributions on a winding up are taxed on the shareholders. Gifts of shares already made cannot be reversed. That is why the decision should be made on the full picture, not as a trial. See our page on closing a family investment company.

The main risks are that the tax assumptions change, that the structure is not run in line with the documents, that the family needs the money back or that a disagreement arises. No FIC-specific legislation has been introduced to date, but tax law can change. We show the risks in writing and design the structure to be robust.

Yes. We start every project from a blank piece of paper, not from a product, so if a family investment company is not the best answer we will say so, and explain what we would do instead, which may be doing nothing. The first call is free. We would rather lose an engagement than set up a structure that doesn't fit.

For some families, yes. Regular gifts out of surplus income, if properly documented and made from income, not capital, are exempt from inheritance tax, along with the annual exemption and small gifts. They suit people with a large surplus income, and they involve no company at all. They do not move the growth of a capital sum out of the estate in the way a FIC can.

To keep the comparison clear. It shows what builds up inside the company compared with what you would hold personally, both before any extraction. In practice there is further tax when money leaves the company: a loan repayment is tax-free, but a dividend is taxed on the recipient. That second layer narrows the gap, so treat the result as the best case for the company.

25%, the main rate of corporation tax for 2026/27. A family investment company is usually a close investment-holding company, which cannot use the 19% small profits rate or marginal relief. Dividends the company receives from other companies are generally exempt, so the 25% applies mainly to interest, rent and chargeable gains. If the company ever qualified for the lower rate, the result would change.

Because that is how the rules work. A company is generally exempt on dividends it receives, so a UK company paying a dividend does not create a second layer of corporation tax for the family company. An individual receiving the same dividend is taxed on it at 10.75%, 35.75% or 39.35% after the £500 dividend allowance. This difference is a main reason the company can come out ahead.

It applies capital gains tax at 18% or 24% depending on your tax band, after the £3,000 annual exempt amount. It assumes gains are realised and taxed in the way set out on the page, not rolled up indefinitely. Real outcomes depend on when you sell, other gains you make and whether you hold investments in an ISA or pension, which the calculator does not model.

No. It leaves out set-up costs and the annual cost of accounts, a corporation tax return and Companies House filings. These costs are real and can reduce or remove the advantage for smaller sums. Set a rough annual cost against the yearly difference the calculator shows to judge whether the company is worthwhile.

Because a basic-rate taxpayer pays 20% on interest, which is less than the 25% a company pays, and 10.75% on dividends. The company's advantage grows with your marginal rate. At lower rates the gap closes or reverses, which is one reason a family investment company usually suits higher and additional rate taxpayers with surplus funds.

Use cautious, realistic figures rather than best cases, and split the return between income and growth if the calculator asks you to. Investment returns are not guaranteed and can fall, so it is worth running more than one scenario. The calculator assumes steady returns each year, which real markets do not provide. We do not recommend investments.

It compares the sum invested in each case and does not model how the company is funded. In practice, funding by loan means the parents can be repaid tax-free and the loan stays in their estate, which affects inheritance tax rather than the income tax comparison here. See the inheritance tax and loan repayment tools for those points.

No. It compares income tax, corporation tax and capital gains tax only. The inheritance tax effect of a family investment company, which is its main advantage for many families, is estimated separately in our Inheritance tax saved by a FIC tool. Use both together for a fuller picture of the benefits.

No, it is a rough guide. The calculator uses standard assumptions and ignores your other income, running costs, how money is taken out and your family's plans. Use it to see whether the idea is worth exploring, then talk to an adviser who can model your own position. A free first call is the place to start.

From growth. If the parents lend money to the company, the loan stays in their estate at face value, so there is no saving on the original sum. The company invests the money, and the growth belongs mainly to the children's shares. Because that growth is outside the parents' estate, the 40% inheritance tax that would have applied to it is avoided, provided the gifts of shares survive the seven-year period.

Because 40% is the rate of inheritance tax above the nil-rate band, and the growth is the only part that moves out of the estate. The loan itself is still counted. The saving shown is the 40% tax that would have been due on the growth if it had stayed in the estate, which is the most the structure can save before allowing for any other effects.

By default, no. It ignores the £325,000 nil-rate band and the £175,000 residence nil-rate band, so it assumes the growth would have been taxed at 40% in full. If your estate is smaller, or the bands would cover part of the growth, the real saving will be lower. We can model the bands properly on a call.

A gift of shares is generally a potentially exempt transfer, so it becomes taxable if the donor dies within seven years. The value gifted is usually the value of the shares at the date of the gift, which for a newly formed company is small, so the effect is limited. Taper relief can reduce the tax on larger gifts made between three and seven years before death. The calculator does not model this.

Yes, at its face value, to the extent it has not been repaid. That is why the calculator shows the loan separately: the loan is not the saving. Repaying the loan to the parents increases their estate, so some families keep it outstanding or spend repayments, while the loan repayment planner shows how repayments change the remaining balance.

A loan. A gift of cash to the company is generally a chargeable lifetime transfer, with a 20% entry charge above the nil-rate band, so the calculator treats the main funding as a loan and the gift of shares as the only gift. Many families fund by loan for this reason, though some also make smaller cash gifts.

Use a cautious figure that you would be comfortable defending, and test more than one. Investment returns are not guaranteed, and the inheritance tax saving rises or falls with them. A higher rate over a longer period gives a bigger figure, but it may not be realistic. We do not recommend investments, and the result is not a forecast.

The calculator assumes that growth belongs to the children's shares, so the split between children does not change the total estate saving. It matters for fairness, for each child's own tax position and for control. You can use different share classes to give different children different amounts, which is part of the planning rather than something the calculator models.

No. It estimates the inheritance tax saving on growth under a family investment company only. A trust may give a different result, with its own entry charge and 10-year charges. We can compare the two in your own circumstances on a free call, including the control, flexibility and costs of each.

No, it is a rough illustration. It ignores your other assets, allowances, reliefs, the gift with reservation rules and how the shares are actually structured. Tax rules also change. Use it to see the scale of a possible saving, then take advice before acting. All calculations run in your browser, and nothing is stored.

Because it is their own money coming back. A loan repayment is a return of capital, not income or a gain, so the parents pay no income tax or capital gains tax on it. That is a main reason families fund a family investment company by loan: they keep access to the capital while the growth builds up for the children.

Yes, at face value, to the extent it has not been repaid. The loan is an asset of the parents, so inheritance tax applies to it on death. The planner shows the remaining balance for that reason. Repaying it reduces what the company owes but brings the cash back into the parents' estate, so repayments do not save inheritance tax by themselves.

The amount repaid in the year, the loan balance remaining at the end of the year and the cumulative total repaid. Together these show how quickly the loan comes down and how much stays in the estate. The figures are based on equal annual repayments over the period you choose, so they are an illustration rather than a schedule the company has to follow.

Not necessarily. The loan agreement can allow repayment on demand or at the company's discretion, and it is often drafted to be flexible. What the agreement says is what matters. The planner uses an even schedule only to illustrate how a loan can be repaid, and a real repayment plan depends on what the company can afford.

It can, and the planner has an optional interest setting. Interest the company pays to the lender is generally a deductible expense for the company but is taxable income for the parent receiving it, so it can create a tax cost at their marginal rate. Many family investment companies lend interest-free, though the choice depends on the circumstances.

From its investments, by selling assets, receiving income or using cash. The company can only repay what it can afford, and it must keep enough to meet its tax and running costs. The planner does not model the company's cash, so the repayment figures show what is possible in principle rather than what the company will actually be able to pay.

The loan is part of the lender's estate, so the executors can ask the company to repay it, or the benefit passes under the will. Its value for inheritance tax is the amount still owed. The loan agreement and the will should be drafted with this in mind, and this is one reason a family investment company needs a solicitor as well as tax advice.

If the investments fall in value, the company may be unable to repay the whole loan. The loan is then worth less than its face value, which could reduce the inheritance tax on it, but the lender has lost money. This is a commercial risk to weigh before lending. The planner assumes the company can meet the repayments you enter.

It reduces the inheritance tax benefit if the repaid money is kept rather than spent, because the cash returns to the parents' estate. Equally, a loan that is never repaid does not give the parents access to the capital they may need. The planner helps you see the trade-off, so you can balance access to money against the amount that stays in the estate.

No. It is a rough illustration. It ignores the terms of an actual loan agreement, interest, the company's investment performance and its tax. Your repayment plan should be agreed with your adviser and documented by your solicitor, who can also confirm how the terms affect the loan's treatment. All calculations run in your browser, and nothing is stored.

The couple's properties were held personally, and a company could only hold the family structure once the portfolio sat inside it. Moving them in first, with the available reliefs, meant the transfer itself did not trigger a large tax bill. Only then was the share structure for the family designed. Each stage had its own purpose and its own tax analysis.

The business had been run as a genuine partnership since 2022. When a partnership's property goes into a connected company, a partnership relief can reduce the stamp duty land tax that would otherwise arise on the market value. Whether a real partnership exists is a question of fact, so the evidence was reviewed carefully. Our sister firm, Property Tax Advisory, covers this part in detail.

Freezer shares have a capital entitlement fixed at the value when they are issued, so the couple's slice of the company stops growing. They can still carry the votes and some dividend rights. That let the couple stay in control while the growth went to other shareholders. The trade-off is that the frozen value remains in their estates.

Growth shares only benefit from value above an agreed starting point, so on day one they are worth little. Issuing them at that point means very little value leaves the couple's estates, which limits the inheritance tax consequences of a gift or a settlement. The real value arrives later, as the company grows, and by then it belongs to the new holders.

A discretionary trust lets the trustees decide who benefits and when. That helps if a child's circumstances change, if some children need more support than others, or if the family wants growth to reach grandchildren. It can also help protect the shares from being lost to a divorce or a creditor. Here the couple are irrevocably excluded from benefiting under the trust, which helps avoid a gift with reservation. Giving everything outright would remove the flexibility.

No. A trust holding shares falls under the relevant property regime. A low starting value helps with the entry charge and with exit charges in the first ten years. But the trust is charged on its value at each ten-year anniversary, at up to 6%. So successful growth shares will bear those charges later. The trade-off is flexibility and control against a periodic cost.

Splitting a company into freezer and growth shares depends on putting a defensible value on each class on the day they are issued. That value drives the inheritance tax position of the gifts and the trust settlement. Our team prepared it directly, so the valuation, the share rights and the tax analysis were consistent with one another and with the clearance application.

HMRC's non-statutory clearance service lets a taxpayer ask for HMRC's view on a point of uncertainty before acting. It is not a statutory ruling, and HMRC will not rule on matters of fact. In this case it was used to give the couple comfort on the technical position before they proceeded, which suited a project completed in under two months.

Much of the delay in structures like this comes from information gathering and drafting. Here the same team handled the incorporation analysis, the share design, the valuation and the clearance application together, rather than passing work between separate advisers. The couple supplied property and partnership records promptly, and the legal documents were prepared alongside the tax work.

The principles can apply to portfolios of different sizes, but the design would change. Smaller portfolios may not justify the cost of a trust, while larger ones may need more complex share classes. Every family investment company we advise on is designed from a blank piece of paper around the family's wishes. A free first call is the best way to test whether the idea fits.

Family Investment Company is a specialist UK tax practice that concentrates on setting up and advising family investment companies. Advice is led by a Chartered Tax Adviser (CTA), supported by a team that includes Chartered Accountants. The service exists to give business owners, property investors and wealthy families, and the advisers who work with them, a team that does this work regularly and knows where the traps are.

Yes. We work closely with our sister firms, each a specialist in its own area: Holding Company (holding-company.co.uk), Property Tax Advisory (propertytaxadvisory.co.uk), Transaction Tax Partners (transactiontaxpartners.co.uk) and Demerger Tax (demergertax.co.uk). If your question is mainly about one of those areas, say so on your first call and we will point you to the right team.

We have 15+ years' experience and have set up 50+ family investment companies. Our work has also helped save clients an estimated £100m+ of inheritance tax. That experience covers companies funded from business sale proceeds, from property portfolios and from family savings, and families with one child as well as those with several generations and different needs. We use it to tell you what is realistic for your family.

Mostly business owners with cash in a company or sale proceeds to invest, property investors who want to pass a portfolio on to the next generation, and wealthy families planning for inheritance tax. We also work with accountants, IFAs and solicitors who bring us in for a client. The families differ, but the questions are similar: how to keep control, how to share growth and how to take money out sensibly.

Not as our main service. We focus on advice and structuring, the decisions that shape how a family investment company is taxed for years to come. Most families keep their own accountant, or appoint one, for annual accounts and the company tax return, and we work alongside them. When we set up a company we explain what the yearly compliance involves so that nothing is missed.

A family investment company draws on several areas of tax at once: corporation tax on investment companies, inheritance tax on gifts and loans, the settlements rules, dividend taxation and company law. Many accountants handle annual work very well and bring in a specialist for one-off, hard-to-reverse structuring. We are happy to work with your accountant rather than replace them.

Advice is led by a Chartered Tax Adviser (CTA), the senior professional qualification of the Chartered Institute of Taxation. The wider team includes Chartered Accountants qualified with the ICAEW and the ACCA. That mix matters because a family investment company needs both technical tax knowledge and a clear grasp of accounts, valuations and company law. It is also why we usually work with a solicitor on the legal documents.

Yes, and we prefer to. A family investment company needs legal documents such as the articles of association, a loan agreement and a shareholders' agreement, and it sits alongside your investments and your will. We design the tax side, agree the order of steps with your solicitor and review the documents against the plan. We also work with your accountant and IFA so everyone is working from the same plan.

Most of our work is done by video call, phone and email, which suits families across the UK and fits around other commitments. Some clients like to meet at a key stage, for example when several family members need to agree the plan or the next generation joins the conversation. If an in-person meeting would help, ask us and we will see what can be arranged.

We give tax advice, led by a Chartered Tax Adviser. We do not give investment advice, so we do not recommend what the company should invest in. That is for a regulated financial adviser, and we are happy to work with yours. As the money laundering rules require, we will ask for identity documents before we start work.

We respond the same working day. Many families come to us with a date behind the question, such as a business sale completing, a property purchase or a tax year end. Tell us the date that matters when you get in touch and we will plan around it, from the first call through to company formation, documents and the first filings.

No honest adviser can promise that before looking at the facts. A family investment company often helps with inheritance tax on future growth, but it is not right for everyone, and the saving depends on how much is invested, for how long and how the family takes money out. Our job is to show you what each option means in practice, including costs, and to recommend what fits, even if that is not a family investment company.

So the adviser you speak to is prepared. Knowing roughly who is involved, how much you might invest, where it comes from and what you want to achieve lets the first call focus on your options rather than background questions. It also helps us tell you quickly whether we are the right fit. You can skip the optional questions and add detail on the call.

Only what you are comfortable sharing. A few short questions cover who you are, what you would like to do and how to reach you. You do not need exact figures or documents; a rough sense of scale is enough. Anything more sensitive can wait until the call, which is confidential. If you prefer to talk first, you can use the contact details on the Contact page instead.

Yes. The first call is free and carries no obligation. It is about whether and how we can help. A Chartered Tax Adviser listens to your plans, outlines the options worth exploring and tells you honestly if a family investment company does not look right. If you want to go further, we set out the scope and quote for it on request before any work starts.

A Chartered Tax Adviser, not a sales team. The adviser who takes the call is the person who would lead the work on your structure, so you do not have to explain your position twice. If your accountant, solicitor or financial adviser would like to join, they are welcome, and it often helps to have them there.

That is fine, and common. Say in the form that you are booking on behalf of a client, and give as much or as little detail as is appropriate. We will talk to you first or arrange a joint call, as you prefer. Your client stays your client, and we work alongside you rather than around you.

That is a good reason to book. Many people come to the first call without knowing whether a family investment company, a trust, personal investing or some other approach suits them best. We will tell you what looks sensible given your circumstances, and what would need to be true for the structure to be worthwhile, with no pressure to proceed.

Yes. We only publish real work, with the client's permission, and we anonymise it so that no family can be identified. Our first case study is now on this page, and we add more as clients agree. In the meantime, a free first call is the best way to hear how we would approach a situation like yours.

No. We never publish anything about a client without their permission, and we anonymise examples so that figures, places and family details cannot be linked back to you. Your enquiry and any work we do with you are confidential and used only to advise you. See our privacy policy for how we handle personal data.

Our first case study is on this page, but every family is different, so a general case study is only a guide. The most useful thing is a free first call, where we can describe in general terms how we would approach a situation like yours, what the options would be and what a family investment company would and would not achieve.

The quickest route is the Book a call form, which asks what the adviser needs to know about your family and what you are hoping to achieve. You can also use the email address and phone details shown on this page. However you contact us, your enquiry goes straight to a senior adviser, not a call centre, and we respond the same working day.

A rough idea is enough: who would be involved, roughly how much you might invest and where it comes from, whether you already have a holding company, trusts or a will, and any dates that matter, such as a sale completing. You do not need documents for a first conversation. We will send a specific list later if it makes sense to go ahead.

We respond the same working day. Where it looks like a fit you can book a free call straight away, and otherwise we will reply with a suggested time. On the call, a Chartered Tax Adviser listens, asks questions and outlines whether a family investment company looks sensible. There is no obligation to go any further, and nothing is sold on the call.

Yes. Everything you share about your wealth, your family and your plans is treated as confidential and used only to respond to your enquiry and, if you instruct us, to advise you. Our privacy policy explains how we handle personal data. If you would rather not give details at first, you can keep your first message general and fill in the picture on the call.

Yes. Many enquiries come from advisers on behalf of a client, and we are happy to talk to them first, or to arrange a call with you all together. Your adviser stays your adviser and, if you prefer, we can report through them. Advisers can also use the For Introducers page to see how we work with the clients they refer.

Yes. After the first call, we set out what the work covers and quote for it on request, before any work starts. We do not publish amounts on this website, because the right scope depends on your family and assets. The first call is free, and you do not commit to anything by having it.

Accountants, IFAs and wealth managers, and solicitors. They bring us in when a client with substantial funds wants to pass wealth on while keeping control, for example after a business sale, with a property portfolio or when planning for inheritance tax. We work alongside the introducer's own advice and do not take over the client relationship.

Yes. You remain their accountant, financial adviser or solicitor. We provide the family investment company tax input and, if you prefer, report through you. We do not approach your client about unrelated work or try to take over their annual compliance or investments, and we are happy to say so in writing before you introduce anyone.

Specialist structuring input on a structure you may only see occasionally: share classes, funding by loan, the settlements and gift with reservation rules, the inheritance tax analysis and the extraction plan. Many advisers handle the client's annual work very well but prefer not to design a family investment company from scratch. We design the structure, and our in-house legal team can draft the documents, or we work with your client's own solicitor.

A free first call with a Chartered Tax Adviser, then a written recommendation and a quote on request if it makes sense to go further. The client is not obliged to proceed. We keep you informed throughout, and work with you and any other advisers so everyone is following the same plan.

We respond the same working day. Introducers often come to us with a date behind the question, such as a business sale completing or a tax year end. Tell us the date in your first message, and whether you would like to be on the first call with your client.

Yes. The calculators on this site run in the browser, store nothing, and give a rough guide to how a family investment company compares with investing personally, the potential inheritance tax saving and how a loan could be repaid. They are a way to start a conversation with a client, not a substitute for advice on their own facts.

Yes, if the family wants us to. Our in-house legal team drafts the trust deed, articles of association and shareholders' agreement, along with the loan agreement and resolutions, so the documents match the tax plan exactly. Or we work with the family's own solicitor, whichever they prefer. If you are the solicitor, we agree the terms with you first and review your drafts, so you keep that part of the work.

No. We give tax advice. What the family investment company invests in is a matter for the client and their regulated financial adviser. If you are an IFA or wealth manager, you stay in charge of the investments and we work with you on the structure around them. We can also work with the client's existing adviser.

A short summary is enough: who the client is, roughly how much they might invest and where it comes from, what they are hoping to achieve and any dates that matter. Please check the client is happy for you to share details. You can use the referral form on this page, or ask the client to book a call and mention your name.

We do not publish information about commercial arrangements for introducers on this website. Please ask when you get in touch, and we will explain how we work with introducers. We would always want to be transparent with clients about any arrangement, as professional rules may require, and we are happy to discuss this with you first.

We will tell you and the client honestly. A family investment company is not right for everyone, for example where the sums are small, the client needs the money for income, or Business Relief is the main goal. We would rather say so on the first call than set something up that does not fit. We can suggest alternatives to discuss with their own advisers.

Yes, through our sister firms: Holding Company (holding-company.co.uk), Property Tax Advisory (propertytaxadvisory.co.uk), Transaction Tax Partners (transactiontaxpartners.co.uk) and Demerger Tax (demergertax.co.uk). If your client's question touches those areas, we can bring in the right team, while you stay the main point of contact and your client stays your client.

Use the search box to type a word or phrase, or browse the terms from A to Z. Each definition is short and in plain English, and many link on to a related page or tool for more detail. If a term you have heard is not listed, ask us on a free first call and we will explain it in the context of your own plans.

No. The definitions are simplified to help you follow the subject, and the exact legal tests are more detailed. Tax law uses precise definitions that can change with each Finance Act, and some terms have different meanings for different taxes. Please do not rely on a glossary entry to decide what to do. We will tell you how a rule applies to your own facts.

PET stands for potentially exempt transfer: a lifetime gift to another individual that becomes free of inheritance tax if the person who made it survives seven years. You can find it in the glossary under P, alongside related entries on the seven-year rule, taper relief and chargeable lifetime transfers, which are the gifts that do not qualify.

We review it whenever tax rates, allowances or rules change, and at least once a year. The figures we quote, such as corporation tax and dividend rates, are for 2026/27. If you spot a term that looks out of date, or one you would like added, let us know and we will look at it.

There are five. You get in touch and we respond the same working day. We have a free first call to understand your family, your assets and your goals. We send a written recommendation and a quote on request. If you go ahead, we set up the company and its documents, with our in-house legal team or your own solicitor. Then we provide ongoing support as the company runs and your circumstances change.

We listen first: who you are, how much you could invest, where it comes from, who you want to benefit and how much control and access to the money you need. Then we ask about existing wills, trusts, property and any dates that matter. By the end we will outline whether a family investment company looks sensible, the main tax points and what the next step would be. The call is free and carries no commitment.

A plain-English document setting out what we recommend and why. It covers the proposed share classes, how the company would be funded, how money would come out, the inheritance tax and income tax consequences, the main risks and the alternatives we considered, including leaving things as they are. It gives you something to share with your family, accountant, solicitor and financial adviser, and a record of why each decision was made.

Every package is quoted on request once we understand your family and what you want to achieve. After the first call we set out what we recommend and what the work would cover, and quote for it, so you know the cost before you commit. There are three packages, and you can add extras such as a trust deed or a share valuation. Nothing starts until you have agreed the scope and the quote, and if the scope changes we agree it with you first.

Forming a private limited company and registering it at Companies House; drafting articles of association with the share classes; preparing the loan agreement if the parents are lending; issuing the shares; agreeing a shareholders' agreement where appropriate; and setting up the company's bank or investment account. We design the tax side, and our in-house legal team drafts the documents, or we work with your own solicitor if you prefer.

Usually a few weeks from the point you decide to go ahead. Forming the company is quick, but the planning, drafting the articles and agreements and agreeing them with all the family members is what takes the time. If there is a deadline, such as the completion of a business sale or a tax year end, tell us at the start and we will plan around it.

Our in-house legal team drafts the trust deed, articles of association, shareholders' agreement and loan agreement, working from the plan we design, so the documents match the tax plan exactly. Or we work with your own solicitor, whichever you prefer. If your solicitor drafts them, we agree the terms with them first and review the drafts before anything is signed, so the family's documents and tax plan stay in step.

Usually details of who will be shareholders and directors, how much you plan to invest and where it comes from, any existing trusts or lifetime gifts, your wills, and any property or business interests you want to take into account. If a business sale or holding company is involved, we ask about those too. After the first call we send a specific list so you only gather what is relevant.

There are ongoing costs, though we do not state amounts here because they depend on the company. The company needs annual accounts, a corporation tax return and a confirmation statement filed at Companies House, plus the tax returns of shareholders who receive dividends. If it holds investments with a platform or manager, there are investment charges as well. Running costs should be set against the expected benefit.

After set-up we can help with the follow-through: how and when dividends and loan repayments are best paid, whether the share classes still suit the family, what changes when a child turns 18 or a new grandchild arrives, and how law changes affect the structure. Your accountant usually handles the annual accounts and returns, and we work with them on the planning decisions.

Do not transfer property, shares or significant cash into a new structure, or sign any documents, before you have had advice. Moving existing property into a company can trigger capital gains tax and stamp duty land tax, and gifts can have inheritance tax consequences that are hard to reverse. Talking to us first costs nothing and lets us design the steps in the right order.

Yes. Many families start with a review of their position: what a family investment company could do for them, what the alternatives are and what each would involve. You can then decide whether to go further. Sometimes the review is all that is needed, because the answer is to wait until the numbers justify it or to use a different structure.

It can, and some families choose this for privacy, because an unlimited company may not need to file its accounts at Companies House if certain conditions are met. The trade-off is that the members' liability is unlimited, so they could be personally liable for the company's debts. Whether it suits a family depends on the assets, the lending and their wishes, so it is worth discussing.

Every package is quoted on request once we understand your family and what you want to achieve. There are three: design and advisory; design, advisory and set-up; and set-up with ongoing support. You can add extras such as a trust deed or a share valuation. We do not publish amounts on this website, because the right scope depends on your circumstances. The first call is free, and you do not commit to anything by having it.

We agree at the start who does what. Typically we design the tax plan, our in-house legal team or your solicitor prepares the legal documents, your accountant handles the annual accounts and returns, and your financial adviser looks after the investments. We keep everyone working to the same plan, and your own advisers stay in place. If you do not have an adviser for one of these roles, we can help you think about what to look for.

Business owners, property investors and families thinking about passing wealth on, and the accountants, IFAs and solicitors who advise them. The articles explain how family investment companies work, what they cost and when they suit a family, in plain English. They are meant to help you ask better questions of your advisers rather than to replace advice on your own facts.

No. Articles are general information and do not take account of your own circumstances. Tax rules change, and a structure that works for one family may not work for another. Please speak to us or another qualified adviser before you transfer assets, make gifts or sign documents. A free first call is a good place to start if you want to test an idea.

Articles are grouped by topic, such as funding, share classes, inheritance tax, taking money out and alternatives to a family investment company, and each shows when it was last reviewed. We update them when tax rates or rules change. New articles are being added over time, so check back or ask us if there is a subject you would like covered.

There are three calculators. FIC vs personal investing compares the tax on investing a sum through a company with investing it personally. Inheritance tax saved by a FIC estimates how much inheritance tax could be avoided on future growth. Loan repayment planner shows how parents could be repaid a loan from the company over time. Each opens on its own page with an explanation of how it works.

No. The calculators run in your browser, so the figures you enter stay on your device and are not stored or sent to us. You do not need to create an account or give your email address to use them. If you want us to look at your own position, you can book a call and tell us what the calculators showed.

They use the rates for 2026/27, including corporation tax at 25%, dividend tax at 10.75%, 35.75% and 39.35% after the £500 dividend allowance, capital gains tax at 18% and 24% with a £3,000 annual exempt amount, and inheritance tax at 40%. Rates and allowances change, so if you are reading this in a later tax year, treat the results as approximate.

They are a rough guide only. The calculators make simplifying assumptions, such as steady returns, no inflation and no running costs, so that you can compare approaches clearly. Real results depend on your investments, your other income, your family and how and when money is taken out. Please use them to see the shape of the numbers, not as a forecast or as advice.

Start with FIC vs personal investing if you want to know whether investing through a company beats investing personally for your sum. If your main goal is passing wealth on, try the inheritance tax calculator next. The loan repayment planner is useful once you have decided to lend money to the company and want to see how it could be repaid.

Because an adviser looks at your actual situation. The tools use standard assumptions, while an adviser takes account of your other income, existing allowances, nil-rate bands, the investments you will hold, costs and the order in which money will be taken out. If the numbers differ, ask your adviser which assumptions explain the difference. We can walk through both on a free call.