Family Investment Companies (FICs)
- Ray Best
- Nov 27, 2025
- 3 min read
Updated: Dec 9, 2025
How FICs Can Help Your Clients Manage Wealth More Intelligently Across Generations
Traditional estate planning tools - trusts, direct gifts, and simple wills - still have their place. These methods can be limiting for high-net-worth families and business owners who have significant investment portfolios, multiple properties, or retained profits.
Increasingly, families are turning to Family Investment Companies (FICs) for greater control, tax efficiency, and long-term succession planning.
At Wills, Tax & Trusts Ltd, we work exclusively with accountants to build these structures around your clients' personal and business realities - helping you deliver high-value planning solutions with confidence.
What is a Family Investment Company (FIC)?
An FIC is a private limited company created specifically to manage and grow family wealth. Unlike a trust, it is a corporate vehicle - governed by the Companies Act - which provides families with greater flexibility and a formal, tax-efficient framework for:
Holding and reinvesting wealth.
Managing succession over time.
Retaining control while gradually passing on value.
Key structural features typically include:
Shareholders: family members.
Directors: usually senior family members or parents.
Assets: property, equities, surplus profits, or investment portfolios.
Share Classes: voting shares for control; non-voting shares for value transfers.
Why FICs are Gaining Traction
Tax Efficiency
Corporate tax is often more favourable than personal tax - especially for families reinvesting wealth over time:
Companies pay 19%-25% on profits vs. up to 45% income tax on individuals.
Dividends can be retained for reinvestment without immediate tax.
Distributions can be controlled to manage income tax exposure.
Succession Without Loss of Control
An FIC allows wealth to be passed on gradually while keeping strategic decisions in trusted hands.
Parents/directors retain control via voting shares.
Children receive non-voting shares, allowing them to benefit without decision-making power.
Over time, further shares can be gifted, sold, or restructured to manage tax and access.
Inheritance Tax (IHT) Planning
Gifting non-voting shares during one's lifetime can reduce the taxable estate. If the transferor survives for 7 years, the value falls outside their estate, potentially saving 40% IHT on that amount.
Risks & Considerations Accountants Should Be Aware Of
FICs are powerful tools - but they are not off-the-shelf solutions. Proper planning and professional oversight are essential.
Setup Costs: Legal drafting, tax advice, bespoke Articles of Association, and share structures are needed.
Ongoing Compliance: Directors must file accounts, maintain company records, and adhere to governance obligations.
HMRC Oversight: Although a 2022 HMRC review raised no red flags, tax law continues to evolve - planning must remain agile.
Misuse Risks: Poorly structured FICs can lead to control issues, tax inefficiencies, or HMRC scrutiny.
Is FIC Right for Your Client?
You should consider introducing the idea of an FIC if your client:
Owns a property portfolio or large investment assets.
Wishes to retain control as they start passing on wealth.
Wants to create a formalised family governance structure.
Is concerned about inheritance tax, or how wealth is passed across generations.
Key Benefits for Accountants & Your Clients
Structured succession planning.
Tax-efficient income and capital retention.
Intergenerational governance.
Preserved family control.
Compliant estate reduction strategies.
Strengthen Your Advice with Specialist Insight
Access our Accountant Portal for trusted updates, technical guidance, and strategic commentary on estate planning, inheritance tax, and trust law. Built exclusively for professional advisers, it equips you with the knowledge and tools to support high-net-worth and business clients with confidence - and stay ahead of regulatory change.
Comments