Family investment companies (FICs) are becoming more popular for succession planning in Owner Managed Business companies.
A Family Investment Company is a private company whose shareholders are family members, and offers a potential alternative to a family trust.
It enables its founders/parents to retain control over assets whilst accumulating wealth in a tax efficient manner and facilitating future succession planning; passing investments down to children or grandchildren.
FICs can offer a tax efficient way of bringing income under the corporation tax regime instead of personal taxes. A company will pay corporation tax, which is lower than higher rate personal income tax rates.
In addition, corporation tax is not payable on the majority of dividends received by FICs, and management and business expenses will often be deductible for corporation tax purposes - whereas they would not be for individuals.
Please ask us about the possibility of a FIC for your specific circumstances.