What is a Family Investment Company?

Recognised by HMRC, a Family Investment Company is a standard way of preserving family assets for future generations whilst mitigating any tax. As a special type of subsidiary or standalone company, this gives you the power to invest your company profits and surplus cash in property, stocks, and/or many other asset classes. A Family Investment Company has a high street bank account, similar to your current business account, and from this account you then control how the money is invested.

Who controls a Family Investment Company?

A Family Investment Company allows you, the company director, to maintain full control. All decisions and control of the company are managed by you — for example, paying dividends. Other members are not decision makers.

How is a Family Investment Company taxed?

FICs are taxed at the corporate tax rate on their profits, including income from investments such as interest, rent, and dividends. The UK Corporation Tax rate is 25% (as of 2026). When dividends are paid out to shareholders, they are subject to dividend Income Tax at the personal level, but this can be planned carefully to reduce the overall family tax burden.

What assets can a Family Investment Company hold?

FICs allow families to invest in a wide range of assets — for example, stocks and shares, loans, gold, property, and more — with corporate tax rates applied to the profits.

How does a FIC help reduce Inheritance Tax?

FICs can be structured to reduce the founder's personal estate over time. By gifting shares to family members, founders can benefit from IHT exemptions over a period of 7 years, at which point the liability does not exist.

How does a FIC protect Business Property Relief on a trading company?

If HMRC rules are breached by your trading company — either by investing funds or simply holding profits within it — you are at risk of losing Business Property Relief (BPR), as HMRC will deem your trading company an investment company. IHT will be due on the assets and shares held, resulting in a 40% tax liability. This can be mitigated by using a Family Investment Company instead.

How does a FIC differ from a traditional trust?

Whilst both FICs and trusts are used for wealth management and succession planning, Family Investment Companies allow founders to retain more direct control over assets compared to trusts. FICs also offer more flexibility in terms of share structure and control, whilst trusts have set rules and limitations.

Can a Family Investment Company be combined with other tax planning structures?

A Family Investment Company can be combined with a Small Self-Administered Scheme (SSAS) — a corporate pension scheme exclusively available to UK company directors. This combination is called a Lifetime Business Tax Plan, which aligns your business, wealth, investments, and financial situation to achieve ultimate tax efficiency whilst protecting and growing your wealth for generations to come.

How does a FIC support succession planning?

Shares in a FIC can be passed on to heirs without the timescales, worries, and costs of probate, simplifying the inheritance process. FICs offer a vehicle for transferring wealth across generations, ensuring long-term financial security for the family.

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LBTP Frequently Asked Questions

The Lifetime Business Tax Plan (LBTP) is a powerful and flexible vehicle that enables the alignment of your business, wealth, investments and financial situation, legally allowing you to minimise your tax liability. It is created by joining two components: a Family Investment Company (FIC), which facilitates the purchase of investment assets or holds cash, and a tax-exempt investment account known as a Small Self-Administered Scheme (SSAS), which holds returns from investments. Find out more about the Lifetime Business Tax Plan by clicking on the frequently asked questions below.

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FAQs

What are Lifetime Business Tax Plans?

A Lifetime Business Tax Plan is a packaged solution, exclusively for company directors, that enables them to solve multiple problems for their business and offers tools to:

Solve the immediate threat of a 40% tax penalty on surplus company cash
Transfer in company and pension cash to create significant liquidity
Protect family wealth and assets
Secure inheritance of company shares
Achieve wider investment choices in a low to zero tax plan
Create lifetime and beyond tax and inheritance strategies
Fund your business
Create succession plans
Grow the retirement fund
Invest in property

Lifetime Business Tax Plans encompass two major components; the Family Investment Company and the Small Self-Administered Scheme (SSAS). These exclusive tax mitigation plans also allow directors to transfer in former work pensions that are frozen or unmanaged. The transfer of company cash and former pension cash into one plan can create significant liquidity, providing wide investment choice in a low to zero tax plan.

Who is the Lifetime Business Tax Plan (LBTP) designed for?

The LBTP is made up of two components — the Family Investment Company and the SSAS — both of which are exclusively available to company directors. It is particularly suited to directors of limited companies who hold surplus cash in their business and want to protect wealth for their families.

Is the LBTP recognised by HMRC?

A Family Investment Company is recognised by HMRC as a standard way of preserving family assets for future generations whilst mitigating tax. A Small Self-Administered Scheme is also recognised by HMRC as a standard form of investment savings vehicle for a company. Both components need to be registered with HMRC, and annual compliance reporting is required.

Why might my company cash be at risk of a 40% tax charge?

Most business owners are unaware that surplus cash in their company is subject to a punitive 40% tax charge, because the starting point for HMRC is that company cash is an asset and therefore tax is due on it. Should the business owner choose to invest profits in anything other than day-to-day trade, they will become immediately liable for a 40% surcharge on profits they have already paid Corporation Tax on.

How could my trading company inadvertently become an investment company?

HMRC applies a series of 20% tests to determine whether a company is a genuine trading company. These tests determine whether the cash represents more than 20% of the balance sheet, turnover, or profit. HMRC have also been known to win tax tribunals where a director spends more than 20% of their time managing investments rather than focussing on the trade of the company.

How does the Family Investment Company (FIC) element of the LBTP work?

The FIC enables company cash to be moved into a bank account linked to the plan. Shareholders remain in full control of all the cash, but that cash is effectively held in trust for the benefit of their family. The cash can be invested within the plan in any asset class from property to shares, and tax is only applied to the gains made through investments, not the actual cash held.

Who retains control of the cash within the LBTP?

Surplus cash remains under the full control of the company director and is moved into the Family Investment Company, also fully controlled by the company director. The cash can be returned to the main trading company at any time, should a cash injection be required.

What are the key benefits of a SSAS?

A SSAS corporate pension scheme, exclusively available to company directors, that can receive profits from a Family Investment Company without suffering a tax charge. It can also make investments that are not subject to Capital Gains Tax or Corporation Tax. Key benefits include the ability to pool pensions with family members, invest in commercial property, purchase your own business premises, and ring-fence assets.

How does the LBTP help with Inheritance Tax?

Company directors with future beneficiaries such as children or grandchildren can mitigate a 40% charge on investments using a Lifetime Business Tax Plan. The components together protect cash from a tax charge, as well as returns generated, from further taxes. Shares are held in trust for beneficiaries but remain under the control of the business owner, further protecting family wealth from excessive Inheritance Tax.

Why hasn't my accountant or financial adviser mentioned the LBTP?

Professional people working in the accountancy or financial advice sector only operate within their chosen specialist field and rarely interact with each other. A Lifetime Business Tax Plan is the solution that builds a bridge between a company tax product and a company investment product.

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Paul Reid

I am nearly through the setup process for my SSAS. HMRC have taken about 12 weeks to approve the scheme. TLPI have been quick in getting the SSAS setup process started and have monitored the HMRC approval, responding to questions HMRC asked. TLPI prepared the new bank account application and pension transfer request, ready to submit upon HMRC approval, of the SSAS. Time to complete the setup is as short as possible with TLPIs proactive setup process.

Colin Woodhouse

Excellent service, held my hand and guided me through the whole SSAS Process. Very pleased with TLPI and their staff who are all very helpful in all respects.

Tina Nguyen

I had the pleasure of working with Akash Bajij while setting up my Family Investment Company, and I couldn’t recommend him more highly. He’s not only extremely knowledgeable, but also genuinely takes the time to listen and provide thoughtful, tailored advice. Akash guided me through the entire process with clarity and professionalism, making what initially felt complex much more manageable. A truly good guy—honest, approachable, and always willing to help. I’m really grateful for his support and would happily recommend him to anyone looking for expert guidance in this area

Kenneth Irabor

I am incredibly pleased with the service provided by TLPI in setting up my SSAS pension. The team was professional, knowledgeable, and supportive throughout the entire process. They guided me every step of the way, ensuring that everything was handled smoothly and efficiently. Thanks to their expertise and commitment, I've already seen an initial successful investment, which has given me great confidence in their abilities. I highly recommend TLPI to anyone looking for top-notch support in managing their pension and investments.

Glenn White

TLPI has been fantastic from start to finish. From my first conversation with Gareth Robertson I had absolute confidence they were the right company for me and my pension assets. After enduring the long HMRC approval process, my SSAS is now fully established and funded, and we are already working on plans to invest and grow it. Gareth and the rest of the team dealt with the entire process extremely professionally, keeping me up to date throughout and responding to my many questions and queries quickly and effectively. I fully recommend TLPI and am looking forward to working with the team for many years to come to maximise my pension assets.

Tommy Meads

We used Jordan @ TLPI to set up a family trust for our company to purchase a commercial property. He was efficient, informative and professional every step of the way. If there were any queries during the whole process they were resolved promptly. This was our first dealings with family trusts and TLPI's guidance during this time was highly valued! I would highly recommend them!

Preet Singh

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Chris Airey

It is great to be working with people who want you to win. My key contacts Spencer and Isi know their business - practical and expert.

Liam Thomas

Jordan looked after us incredibly well from start to finish. Dealing with tax can be a complicated process but Jordan simplfies everything and takes the time to answer all of your questions in detail. Would highley reccomend.

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TLPI provide a brilliant service full stop. From our initial conversations they have been extremely helpful, diligent and thorough. I can't thank them enough for their advice, pointers and guidance that they have provided so far. They have made something which to me is extremely complex and confusing feel very straight forward.

Cris Emson

I much appreciate the help and guidance TLPI have given me in setting up a Family Investment Company, and now we have reached the end of the first year we are now preparing the first set of annual accounts. Again TLPI are proving invaluable is giving help and advice, and I am sure none of this would be possible without their expert support.

Keith Jones

Tlp have been fantastic with there advice and help in setting up my retirement plans , putting structures into place to help with future generational hand over of assets, great advice from Jordan Sharpe, easy to deal with and always on hand for help when needed, well done all, 👏 ✔️

Big thanks to sue for all your outstanding work, sue kept me updated with my pension transfer every step of the way, I would have no problem referring them on to anyone who needs sound advice and financial pension planning, thanks again for all your help,

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