Family Investment Company

Build and protect family wealth across generations

A Family Investment Company (FIC) is a private limited company, owned by family members, that holds and grows investments on their behalf. It gives company directors a flexible, tax-efficient way to protect wealth, plan for succession, and mitigate Inheritance Tax.

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Family business succession planning
40%
top rate of Inheritance Tax - the rate a FIC structure is designed to reduce
HMRC-compliant family wealth structure
What it is

A private company, built for your family

A Family Investment Company pays Corporation Tax on its profits, but the dividends it receives from its investments are largely exempt - so investment income can be reinvested and compound within the company.

A FIC gives the founding directors full control over the company's assets while allowing other family members - children, grandchildren, spouses - to hold shares. Each class of share can carry different rights, so the founder controls the company while gradually distributing economic value to family members at lower tax rates. Its strengths are long-term family wealth planning, keeping control across generations, and Inheritance Tax mitigation - not a zero tax rate.

How it works

Directors keep control. The family grows the wealth.

The founding director holds voting shares with full control over the company and its assets. Other family members hold non-voting shares, giving them economic rights - dividends and capital appreciation - without control over decisions.

  • Director retains voting control at all times
  • Non-voting shares for children, grandchildren and spouses
  • Investment income compounds inside the company
  • Shareholder loans and debentures for tax-efficient extraction
FIC share structure diagram
What it does

Four things a FIC lets you do

Things a personal investment account or trust cannot replicate as flexibly. Select a card to see how it works.

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Keep control across generations
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Different share classes let the founding director retain voting control while distributing economic value to family members. You decide who receives dividends and on what terms - without giving up control of the company.

IHT
Reduce Inheritance Tax
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Assets held in a FIC may fall outside the estate for Inheritance Tax purposes. By gifting non-voting shares to family members - particularly children - over time, the estate value reduces without the donor losing control of the underlying assets.

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Extract wealth tax-efficiently
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Profits retained inside the FIC grow free of further taxation until extracted. When extracted as dividends, shareholders pay dividend tax - which is lower than Income Tax on salary for higher-rate and additional-rate taxpayers.

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Plan for succession
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Shares can be issued to, or purchased by, the next generation at any time. Because the FIC is a company, share transfers are straightforward and well-understood by HMRC. The family retains the asset as a whole while individual shareholdings change over time.

Tax advantages

A long-term tax-efficient wrapper

When combined with a SSAS, a FIC forms part of the Lifetime Business Tax Plan - the most comprehensive structure available to company directors.

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Dividends received from UK companies are largely exempt from Corporation Tax, so investment income rolls up tax-free within the FIC.

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Investment returns compound inside the company until extracted, deferring personal tax indefinitely.

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Non-voting shares for family members can be issued at nominal value, gifting future growth outside the estate.

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Dividend extraction is taxed at lower rates than salary - 10.75%, 35.75% or 39.35% depending on the shareholder's rate.

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Assets within the FIC may fall outside the estate for Inheritance Tax purposes after the seven-year gifting period.

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Shareholder loans allow capital to be extracted without triggering dividend tax, up to the amount originally lent.

FAQs

FIC questions, answered

The questions company directors ask us most about the Family Investment Company.

A Family Investment Company (FIC) is a private limited company set up by a family - typically a company director or business owner - to hold and invest family wealth. It uses the corporate tax regime rather than the personal tax regime, and different share classes allow control and economic benefit to be split between family members.

A FIC is most suitable for company directors and high-net-worth individuals who want to grow family wealth tax-efficiently, reduce their Inheritance Tax exposure, and control how assets pass to the next generation. It works particularly well alongside a SSAS pension as part of a Lifetime Business Tax Plan.

By gifting non-voting shares to family members - particularly children - the founder moves future growth outside their own estate. After seven years, those gifts are generally outside the estate for Inheritance Tax. The founder retains control through voting shares but the economic value (dividends and capital growth) accrues to the next generation.

No. A FIC is a company, not a trust. Trusts are subject to a ten-year anniversary charge and entry charges under the relevant property regime. A FIC avoids those charges and uses the familiar UK company law framework, which is well-understood by HMRC and straightforward to administer.

No. A FIC is a private limited company and is not an FCA-regulated product. However, if the FIC holds certain regulated investments (such as listed securities), individual transactions may need to comply with financial promotion rules. TLPI is a tax planning specialist, not an FCA-regulated firm.

A SSAS is a corporate pension scheme that reduces Corporation Tax on contributions and provides a tax-free pension wrapper. A FIC is an investment holding company that grows family wealth and reduces Inheritance Tax. The two structures complement each other and together form the Lifetime Business Tax Plan.

A FIC commonly uses multiple share classes - for example, A shares (founder, with voting and dividend rights), B shares (children, dividend rights only), and C shares (spouse, as appropriate). The precise structure depends on the family's objectives and is designed by the tax adviser and solicitor working together.

Yes - and this is the Lifetime Business Tax Plan. A SSAS reduces Corporation Tax on pension contributions and grows those assets tax-free. A FIC receives investment income largely exempt from Corporation Tax and builds long-term family wealth. Together they address every stage of a director's financial and succession planning.

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