Family investment companies
A Family Investment Company (FIC) is a well-structured private company (limited or unlimited) that holds family assets with family members as shareholders. Besides controlling the family assets, it allows also allows you to transfer wealth to the next generation. FICs are the tax-efficient method enabling the transferring a significant amount of cash into the company and pass on family wealth without immediate charge to the inheritance tax (IHT).
Family investment companies have attracted many corporate companies, entrepreneurs, and business owners to provide valuable guidance for the families to invest the wealth accurately and grow their assets with varied benefits, including IHT. By investing through FIC, it will help both in Income Tax, Capital Gains Tax saving and enjoy other features as well.
How do family investment companies work?
It’s simple when it comes to transferring assets. While the parents form a family company limited to put up cash or assets into that company and create shares to own. Each share they own has the right to appoint one director at general meetings. However, they are not entitled to dividends or any returns of the capital. The shares that they hold are given the capital value to the children. But parents can keep control over the assets in the company. If the parents like to approve, they can give full entitlement of the dividends or return on capital to the children.
Children here are the sole beneficiary, and the parents are stakeholders to control the cash or assets.
What’s best for you?
Family investment companies have work best for those who would like to invest a substantial amount and allow the wealth to grow over the period rather than getting it frequently. In a way, it’s the best way for a long-term with added benefits. It’s a good opportunity to save taxes and at the same time, it will be a good asset for the children when they grow up.
It is a well-structured and organized way to keep the assets safe when the children are younger. Many consider this approach as the right path to pass on the wealth to the children.
Consult with the Family Investment Company Adviser
Family investment companies have become popular when it comes to tax savings and efficiency in transferring wealth to the next generation. Since FIC is not a trading company, families are hereby seeking a customized approach on how to pass the wealth to their children. But the question does arise what would be the financial planning or where to invest the wealth.
To help you in getting the right advice, you need to consult experts at Future Planning who have in-depth knowledge on FICs.
How Future Planning helps?
You must be aware of both pros and cons when creating the FIC. Having extensive knowledge and updated information, our experts will guide you with a detailed approach as per your needs. Based on the current situation and the value of your assets to be invested, we Future Planning provides you with the right pathways.
Are you in need to create a family investment company? Pick up the phone and call us now to ensure you get the best advice.