The Family Investment Company — often called a FIC — has become one of the most popular structures for wealthy families seeking to transfer assets to the next generation while retaining control.

What Is a FIC?

A Family Investment Company is a private limited company whose shareholders are family members or trusts for their benefit. Its purpose is to hold and grow family wealth: investment portfolios, property, cash, and holdings in operating businesses.

The key design is the share structure. Founders often retain voting rights and income rights, while children or trusts hold growth shares that carry future capital appreciation.

Why Families Choose FICs Over Trusts

FICs can avoid the immediate entry charge that applies to discretionary trusts above the nil-rate band in many common designs. They can also provide simpler governance under company law, broader investment flexibility, and corporation-tax treatment for income and gains.

The Inheritance Tax Position

Shares retained by founders may still be included in their estate if they retain economic interest or control. Careful structuring is essential. Where children’s shares carry future growth, appreciation may fall outside the founders’ estates from day one.

HMRC Scrutiny

HMRC has examined FIC arrangements, particularly aggressive structures. FICs work best when implemented carefully, with proper board governance, arm’s-length transactions, and professional advice.

A FIC is not set and forget. Annual accounts, confirmation statements, and clear records are required.

The Family Investment Company — often called a FIC — has become one of the most popular structures for wealthy families seeking to transfer assets to the next generation while retaining control.

What Is a FIC?

A Family Investment Company is a private limited company whose shareholders are family members or trusts for their benefit. Its purpose is to hold and grow family wealth: investment portfolios, property, cash, and holdings in operating businesses.

The key design is the share structure. Founders often retain voting rights and income rights, while children or trusts hold growth shares that carry future capital appreciation.

Why Families Choose FICs Over Trusts

FICs can avoid the immediate entry charge that applies to discretionary trusts above the nil-rate band in many common designs. They can also provide simpler governance under company law, broader investment flexibility, and corporation-tax treatment for income and gains.

The Inheritance Tax Position

Shares retained by founders may still be included in their estate if they retain economic interest or control. Careful structuring is essential. Where children’s shares carry future growth, appreciation may fall outside the founders’ estates from day one.

HMRC Scrutiny

HMRC has examined FIC arrangements, particularly aggressive structures. FICs work best when implemented carefully, with proper board governance, arm’s-length transactions, and professional advice.

A FIC is not set and forget. Annual accounts, confirmation statements, and clear records are required.