Family Investment Companies

A family investment company (FIC) is an increasingly popular and tax-efficient structure that allows families to manage and grow their wealth across generations. At JMW Solicitors, our expert team of wills, trusts, tax and succession planning solicitors is here to guide you through the entire process of setting up and managing a FIC.

Whether you are a business owner, an entrepreneur, or a high net-worth individual looking to protect your family assets, we provide tailored advice and comprehensive support to help you achieve your financial goals. Our highly specialised team of solicitors can help you to use FICs as part of your wealth protection strategy, and provide the best advice for your specific circumstances.

Contact JMW today to discuss how a FIC can benefit your family’s financial future. Call us on 0345 872 6666, or fill out our online enquiry form to request a call back at a time that suits you.

Our Services for Family Investment Companies

At JMW Solicitors, we provide a comprehensive range of services to help you set up and manage a FIC. Our team of expert solicitors will work closely with you to understand your specific needs and objectives, and ensure that the FIC structure is tailored to your family's financial goals.

When you contact us, we will thoroughly assess your current financial situation and future goals. This allows us to recommend the best course of action to achieve your desired outcomes. By consulting with JMW, you will receive the following support:

Detailed legal advice: we have extensive knowledge of the benefits and drawbacks of FICs. We will discuss these with you in detail to ensure you fully understand all aspects of the FIC structure and its implications for your family wealth.

Collaboration with other professionals: we regularly consult with accountants, investment managers and financial advisers to provide you with the most comprehensive advice. This collaborative approach ensures that you receive up-to-date and informed guidance that considers all financial, legal and tax aspects of setting up and managing a FIC.

A holistic approach: our services are designed to offer a holistic approach to your wealth management and succession planning needs. By leveraging our vast experience in estate planning law and current financial information, we can help you create a robust and effective FIC structure that meets your family’s long-term objectives.

Tailored solutions: every family’s situation is unique, and we provide personalised solutions that reflect your specific circumstances. Whether you need help with the initial setup, ongoing management or strategic tax planning for your FIC, JMW is able to support you.

Our highly specialised team of solicitors is dedicated to ensuring that your FIC operates smoothly and efficiently, to provide you with peace of mind and a secure financial future for your family.

Meet Our Team of Wills Solicitors

Our team provides expert advice on setting up and managing Family Investment Companies, helping you structure your wealth efficiently for future generations.

What Is a Family Investment Company?

A FIC is a private company specifically structured to hold, manage and grow family wealth. It allows family members to become shareholders, and facilitates the transfer of substantial cash, investments or other assets into the company.

This business structure provides a formal framework for managing family assets collectively and distributing them in accordance with the family's wishes. This arrangement functions in the following ways:

• A FIC is established as a private company under UK company law.
• Family members are appointed as shareholders of the FIC. Different classes of shares can be issued, allowing for flexibility in voting rights and the distribution of dividend income.
• The company is managed by a board of directors, who are typically family members but can also include trusted advisors. The directors are responsible for making strategic decisions about the management and investment of the company’s assets.
• Cash, investments or other assets can be transferred into the FIC. These assets are then managed collectively within the company structure, which can provide a more organised and strategic approach to wealth management.
• An FIC can be structured to facilitate the transfer of wealth across generations. Shareholders can plan for the future by designating shares to be passed on to heirs, ensuring continuity in the management and ownership of family assets.

As a registered company, an FIC must comply with corporate governance requirements, including the filing of annual returns and financial statements with Companies House (if the company is limited rather than unlimited).

At JMW Solicitors, our team of experts can assist you in setting up and managing an FIC, meeting all legal and regulatory requirements and operating the company smoothly and efficiently.

What Are the Benefits of a Family Investment Company?

FICs offer a range of benefits that make them an attractive option for managing and growing family wealth. Here are some of the key advantages:

• Tax efficiency: FICs can be a highly tax-efficient way to manage family wealth. By transferring assets into the company, families can benefit from lower Corporation Tax rates compared to personal Income Tax rates. Additionally, FICs can help reduce Inheritance Tax liabilities and thereby provide significant long-term savings.
• Control over investments: shareholders in an FIC retain control over investment decisions. The company structure allows family members to decide how profits are reinvested or distributed, ensuring that the family’s investment strategy aligns with their financial goals.
• Wealth preservation: FICs help in preserving wealth for future generations. By holding assets within a company, families can ensure that wealth is protected and managed according to their wishes, which can reduce the risk of assets being dissipated.
• Flexibility in profit distribution: FICs allow for flexibility in how profits are distributed among shareholders. Different classes of shares can be issued, providing control over voting rights and dividend distributions. This flexibility helps in managing Income Tax liabilities effectively.
• Asset protection: assets held within an FIC are generally protected from personal liabilities of the shareholders. This limited liability feature minimises personal financial risks and work to better safeguard family wealth.
• Professional management: FICs can benefit from professional management by appointing experienced directors and financial advisers. This ensures that the company’s assets are managed prudently and in compliance with all regulatory requirements.
• Succession planning: an FIC facilitates smooth succession planning by allowing family members to pass on shares to the next generation. This structured approach offers continuity and stability in the management and ownership of family assets, and enables long-term planning.

By leveraging these benefits, FICs provide a versatile and efficient way to manage family wealth, protect assets and pass wealth on to future generations in a tax-efficient manner.

How to Set Up a Family Investment Company

Setting up a FIC involves several key steps :

1. Begin with an initial consultation with our expert solicitors at JMW to assess your family’s financial situation, goals and needs. This will help determine if an FIC is the right structure for you and represent an opportunity to discuss your objectives, such as wealth preservation, tax efficiency and succession planning.
2. Choose a suitable name for your FIC and register it as a private company with Companies House, submitting the necessary documentation.
3. Prepare the Articles of Association, outlining the company’s rules and regulations, and draft a shareholders agreement to specify the terms of ownership, voting rights, dividend distribution, and the transfer of shares among family members.
4. Determine the share capital structure, including different classes of shares if necessary, and transfer significant sums of cash, investments, or other assets into the FIC, ensuring proper documentation for clear records.
5. Appoint family members or trusted advisors as directors to manage the company’s operations and allocate shares according to the agreed structure, which should reflect the family’s succession planning goals.
6. Open a business bank account in the name of the FIC to manage the company’s finances and facilitate transactions.
7. Engage accountants and financial advisors to assist with ongoing financial management, tax planning and compliance, to ensure the FIC operates efficiently and remains compliant with all legal requirements.
8. Maintain proper corporate governance practices, including holding regular board meetings, keeping accurate records, and filing annual returns and financial statements with Companies House. Conduct annual reviews of the FIC’s performance and structure to monitor whether it continues to meet the family’s financial goals and complies with any changes in legislation.

How Much Does It Cost to Set Up a Family Investment Company?

The cost of setting up a family investment company varies depending on several factors, including the complexity of the company structure, the value of assets being transferred, and the professional services required. Here are some of the costs that might be involved:

• Company formation fees for registering the FIC with Companies House.
• Legal documentation fees for drafting the necessary legal paperwork.
• Professional fees for engaging solicitors, accountants, financial advisors and tax advisors for ongoing tax planning and advice.
• Asset transfer costs for transferring assets into the FIC, including valuation fees, Stamp Duty or Capital Gains Tax.
• Ongoing compliance costs, including costs for filing annual returns and regular consultations.
• Banking fees for opening and maintaining a business bank account.

While the costs of setting up an FIC vary, the investment can provide significant long-term benefits in terms of tax efficiency, wealth preservation and succession planning. At JMW Solicitors, we offer transparent pricing and detailed estimates based on your specific needs, to help you understand all potential costs upfront.

Why Choose JMW?

Choosing JMW Solicitors for help setting up and managing your family investment company means working with an award-winning team recognised for excellence and expertise. Our team has been acknowledged by Chambers & Partners and the Legal 500 and has won prestigious industry awards, including Team of the Year at the Manchester Legal Awards. Additionally, many members of our team are members of the highly-respected Society of Trust and Estate Practitioners (STEP).

Our highly specialised team can integrate an FIC into your wealth protection strategy and ensure it aligns with your financial goals. We offer a comprehensive assessment of your situation to determine the best course of action, and can provide clear advice on the benefits and drawbacks of FICs as part of this process.

We have extensive experience assisting a diverse range of high net-worth clients, including families, business owners, entrepreneurs, sports professionals and entertainers. JMW’s ability to handle complex requirements and tailor our services to various needs makes us the ideal choice for managing your FIC.

Our team consists of dynamic solicitors who stay ahead of the curve in succession planning. We understand the unique environments you operate in and provide bespoke solutions to protect your wealth and manage it effectively across generations.

At JMW, we adopt a collaborative approach by regularly consulting with accountants, investment managers and financial advisers to provide you with the most up-to-date and informed advice. Our holistic service leverages our vast experience in estate planning law and current financial information to deliver optimal results.