Wealth Structuring
Family Investment Company
A powerful, HMRC-compliant vehicle for high-net-worth families seeking to preserve and grow wealth across generations — while retaining full control.
Overview
What is a Family
Investment Company?
A Family Investment Company is a private limited company established specifically to hold and manage a family's investment assets — typically property, equities, bonds, gold, and other financial instruments — within a structured corporate vehicle.
Unlike a standard limited company, a FIC is engineered around a bespoke share structure. Founders (typically parents) hold preference shares giving them full voting control and a preferential return on capital. Children or grandchildren hold ordinary shares designed to capture all future growth in value — meaning wealth transfers to the next generation without the founders ever losing control of the underlying assets.
Because investment returns are taxed at corporation tax rates within the company rather than at personal income tax rates of up to 45%, a FIC can significantly accelerate the compounding of family wealth over time.
£500k+
Minimum asset level typically suited to a FIC structure
Why a FIC
Key Benefits
A well-structured FIC delivers across multiple dimensions simultaneously — tax efficiency, control, succession, and privacy.
Inheritance Tax Planning
Ordinary shares gifted to children or grandchildren can fall outside the donor’s taxable estate after seven years, progressively reducing IHT exposure on the family’s investment portfolio. Such shares usually hold no voting rights.
Retention of Control
Founders typically hold preference shares carrying full voting rights. This allows parents to transfer economic value to the next generation while retaining complete authority over investment decisions and distributions.
Corporation Tax Efficiency
Retained profits within a FIC are subject to corporation tax (currently 19% - 25%), significantly lower than personal income tax rates of up to 45%. Investment returns can compound within the company at reduced tax cost.
Capital Gains Planning
Assets can be contributed to the FIC at base cost in certain circumstances, and future growth accrues within the corporate wrapper, deferring personal CGT liabilities and allowing more capital to be invested.
Succession Planning
A FIC provides a formal, legally robust framework for intergenerational wealth transfer, ensuring the family’s investment portfolio is managed according to agreed terms across multiple generations.
Privacy & Confidentiality
Unlike trusts, a FIC is a private limited company with relatively limited public disclosure. Shareholder agreements and articles of association provide tailored governance without public documentation of asset values.
How It Works
Typical FIC Structure
Founders
Preference Shares
Voting Control + Fixed Return
FIC
Private Limited Company
Holds
UK & Intl Property
Listed Equities
Bonds & Fixed Income
Gold & Commodities
Private Company Shares
Loan Notes
Next Generation
Ordinary Shares
All Future Growth
Illustrative structure only. Actual share classes and governance arrangements are tailored to each family's specific circumstances and objectives.
Case Study
The Hargreaves
Family
A composite illustration of a typical FIC engagement. Names and figures are illustrative.
The Challenge
Mr and Mrs Hargreaves had accumulated a £2.8m investment portfolio over 35 years in business. With a combined IHT exposure approaching £1.1m, their existing portfolio was structured entirely in personal names. They wanted to begin transferring wealth to their three adult children but were unwilling to relinquish control or access to the income the portfolio generated.
The FIC Solution
Glenmuir International designed a bespoke FIC with two classes of share: A Preference Shares held by Mr and Mrs Hargreaves (carrying full voting rights plus a fixed 5% cumulative return), and B Ordinary Shares gifted to the three children in equal proportions. All future growth in the investment portfolio accrues within the B Ordinary Shares, outside the parents’ estate, while the parents retain absolute control over distributions and investment decisions.
The Outcome
Within the first 12 months, £2.8m was successfully moved into the FIC structure. Retained investment returns are now taxed at the 25% corporation tax rate rather than at the parents’ marginal income tax rate of 45%, creating a meaningful annual tax saving that compounds over time. Based on 7-year gifting projections and assumed portfolio growth of 6% per annum, the estimated IHT saving over a decade exceeds £840,000.
Suitability
Who Is a FIC
Right For?
A FIC is not a one-size-fits-all solution — but for the right families, it can be one of the most powerful structures available. It is particularly well-suited to:
High-Net-Worth Families
Families with investable assets of £500,000 or more where IHT exposure is a genuine concern.
Business Owners
Entrepreneurs looking to extract retained profits from trading companies into a tax-efficient investment wrapper.
Property Investors
Families with residential or commercial property portfolios seeking to reduce income tax on rental yields and plan for succession.
Long-Term Planners
Parents who want to begin intergenerational planning early, locking in lower valuations while the portfolio continues to grow.
Getting Started
Our FIC Process
Suitability Assessment
We review your family’s financial position, existing tax exposures, estate planning objectives, and timeline to determine whether a FIC is the most effective structure for your circumstances.
Share Structure Design
We design the bespoke share classes — preference shares for founders and ordinary shares for beneficiaries — along with detailed articles of association and a shareholders’ agreement.
Tax & Legal Review
Your dedicated adviser coordinates with tax counsel and solicitors to ensure the FIC is established in full compliance with HMRC guidance and that all transfers are structured to maximise efficiency.
Incorporation
We incorporate the private limited company at Companies House, prepare all constitutional documents, and ensure the registered office, directors, and company secretary arrangements are in place.
Asset Transfer
Investments and other qualifying assets are transferred into the FIC. We manage the documentation, stamp duty considerations, and ongoing HMRC reporting obligations throughout.
Common Questions
FIC FAQs
Important: This page is for informational purposes only and does not constitute tax, legal, or financial advice. Tax treatment depends on individual circumstances and may be subject to change. Always seek independent professional advice before establishing a FIC or making any related investment decision.
Speak to an Adviser
Is a FIC Right
for Your Family?
Every family's situation is different. Our advisers will assess your circumstances and provide a clear, honest recommendation — with no obligation to proceed.