A Family Investment Company (FIC) is a privately held company designed to manage, grow, and protect family wealth over the long term. It offers an increasingly popular alternative to trusts, combining control and flexibility with potential tax efficiencies.
An FIC is typically funded by its founders, often parents or grandparents, via cash, asset transfers, or loans. By structuring different share classes (e.g., voting and non-voting), founders can retain control while gradually transferring wealth to future generations. This makes FICs particularly valuable for succession planning.
Key Benefits:
- Control — founders maintain decision-making power over investments and distributions.
- Tax efficiency — profits taxed at corporation tax rates (currently 25%), often lower than higher-rate personal income tax.
- Dividend exemptions — most dividends received by the FIC are free from corporation tax.
- Inheritance tax planning — gifting shares can reduce the taxable estate after seven years.
- Asset protection — corporate structure may help shield wealth from certain risks.
- Customisation — flexible share structures and shareholder agreements to suit family needs.
FICs are generally most cost-effective for families investing £1 million+ due to setup and ongoing administrative requirements. They are particularly suited to high-net-worth families seeking:
- Long-term intergenerational wealth planning.
- Flexibility in distributing income and capital.
- A centralised vehicle for managing family assets.
At Tacit, we offer professional investment management for FICs, partnering with AJ Bell Securities Ltd for secure custody and specialist administration, allowing our investment team to focus on portfolio growth.
Download the full guide to explore structuring options, funding strategies, tax considerations, and how an FIC could support your family’s financial goals.
