The Family Investment Company (FIC): case study

The world of estate planning can be complex and overwhelming. With so many different strategies available, it can be difficult to know which one is right for you.

Let me share a quick story to help illustrate how different strategies can be used to meet the unique needs and circumstances of some individuals.

Business Succession Planning:

Meet Lewis, the owner of a successful family-run business.

Lewis had always planned to pass the business down to his kids when he retired, but he was worried about the hefty inheritance tax and wanted to ensure a smooth transition for his children.

💡 Solution:

That's where a Family Investment Company (FIC) came in. We showed Lewis how to set up the FIC, which involved transferring ownership of his business to the FIC.

Lewis then gifted shares of the FIC to his children, which were exempt from inheritance tax due to business property relief (BRP). This allowed for the business to be passed down to his children in a tax-efficient manner and for the family to retain control of the business.

By transferring ownership of the business to the FIC, and then gifting shares to his children, Lewis was able to pass on the business in a tax-efficient manner whilst still retaining control of the company. It's a win-win situation for both Lewis and his family.

The pros and cons should be taken into consideration when deciding whether or not to set up an FIC, as every situation is different. I've covered this topic in my other articles.

If you'd like to learn more about Family Investment Companies, you can download a free guide HERE.