There are various ways individuals can look to meet the needs of their family in the future, whilst meeting their own needs today. In our experience, Family Investment Companies offer unique advantages to clients looking to achieve this.

Setting up a FIC

One of the main benefits of FICs as an estate planning vehicle is their flexibility and ability to be customised. However, with this comes the need for careful drafting and tax planning. In addition, FICs have recently been closely scrutinised by HMRC which increases the need to ensure that they are setup and governed correctly.

Elemental is well placed to support private individuals and their advisors on setting up this type of estate planning. We are company formation experts, with qualified company secretaries, solicitors and tax experts.

What to consider

Here are some of the factors to consider when it comes to forming a FIC:

  • Voting –who will have the right to vote and therefore exercise control of the company. Determining who has the right to vote can be set out in the articles of association.
  • income – who would you like income distributed to and how? Consideration should be given to both the life of the company and upon winding up.
  • Appointing Directors – who will control the day to day running of the FIC? This will be carried out by the directors and the roles of responsibilities for the directors can be set out in the shareholder’s agreement, and so can their appointment and removal.
  • Family Events – What happens to the transfer of shares during family events, such as death or divorce.
  • Gifting – if gifting is undertaken by a married couple it can be beneficial for this initial gift to be made by both spouses. Only one spouse needs to survive for 7 years for the gift to be IHT exempt.
  • Nature off the assets – this is particularly relevant during the initial transfer. If property is transferred, there may be stamp duty, as well as capital gains. If there are shares or assets that stand at a loss, they could be used to offset gains elsewhere.
  • Tax Residency – For international clients, where will the company be a tax resident and is there satisfactory evidence of this in place.

Tailored by company formation experts

Our FIC Service is tailored to your individual needs, we usually cover:

Setting up the FIC

How the FIC is setup with the correct drafting is essential to meet your requirements and those of HMRC. We will advise on:

  • the initial transfer of assets,
  • articles of association,
  • shareholders agreements
  • initial share issue and loans
  • capital gains tax and stamp duty.
  • For international clients looking to setup tax residency in the UK we can put all the necessary measures in place, including independent directors.

 

Ongoing management

Like any other company, an FIC will need to remain compliant. We can:

  • File the confirmation statement with UK Companies House
  • Prepare and file the annual accounts with Companies House and HMRC
  • We will also closely monitor HMRC guidance and update you on any changes.

 

Event-triggered support

Our experts will be on hand to discuss matters such as:

  • how to move assets,
  • adding new assets,
  • issuing new shares to family members
  • distributing capital in the most tax effective way.

 

Winding-up

  • When it comes to winding up the FIC, we can act on your behalf and in accordance with your instructions.

Contact us

Nick Lindsay

Director, Governance and Corporate Services<br /> nick.lindsay@elementalcosec.com<br /> +44 203 286 6222

Dhruv Patel

Director, Tax and Accountancy<br /> email: dhruv.patel@elementalcosec.com<br /> tel & mob: +44 203 286 6249

HOW WE CAN HELP

Our specialists offer a comprehensive service, from the identification of the target through to due diligence and acquisition. Please get in touch to discuss how we can help.

UK ADVISORY NETWORK

Elemental CoSec is a proud member of the government’s UK Advisory Network and recognised as a specialist in assisting businesses setting up in the UK.

We’re here to keep things simple

If you would like to find out more about our services and how we can help support your business, please get in touch.

+44 (0)203 286 6229