Family Investment Company

For decades, trusts were the default vehicle for passing family wealth down a generation. But since lifetime transfers into most trusts began triggering an immediate 20% inheritance tax charge above the nil-rate band, families with significant assets have increasingly turned to the family investment company (FIC): a private company whose share structure separates control from value, so parents keep the decisions while growth accrues to their children.

Acumon designs, incorporates and runs FICs for families across the UK — working alongside your solicitors on the legal framework and handling the tax, accounts and compliance year after year.

What Is a Family Investment Company?

A FIC is a private limited company set up to hold family investments — typically cash, share portfolios or property. The founders usually fund it by lending money to the company or subscribing for shares, and the constitution is deliberately bespoke: voting shares for the founders, who act as directors and control every investment and distribution decision, and non-voting or growth shares for children, grandchildren or family trusts.

The effect is a clean separation of control from value. Future growth in the company builds up in the younger generation's shares — outside the founders' estates — while the founders decide what the company buys, sells and pays out, and the articles and a shareholders' agreement can restrict who may ever hold shares. A loan from the founders can also be repaid to them over time, tax-free, giving continued access to their original capital.

The Tax Position

A FIC pays corporation tax — 19% to 25% for 2026/27 depending on profits — rather than personal tax rates of up to 45%. Crucially, most dividends the company receives from its investment portfolio are exempt from corporation tax altogether, so an equity portfolio can compound inside a FIC with little or no annual tax drag. Interest and rental income are taxable, and companies get no annual exempt amount on capital gains.

Tax arises when profits are extracted: dividends paid to family shareholders are taxed at 10.75%, 35.75% or 39.35% for 2026/27, above the £500 dividend allowance. Families who mainly want to roll wealth up rather than draw income therefore benefit most. For inheritance tax, funding a FIC is not a chargeable lifetime transfer — so unlike a trust there is no 20% entry charge and no ceiling on what you can put in — and later gifts of shares are usually potentially exempt transfers that fall out of your estate after seven years.

FIC or Trust?

A trust triggers a 20% IHT entry charge on lifetime transfers above the £325,000 nil-rate band, ten-yearly anniversary charges of up to 6% and exit charges — and trustees pay tax at the top rates with only a £1,500 CGT exemption. A FIC has none of the entry or anniversary charges, taxes returns at corporate rates and lets you transfer unlimited value into the structure, which is why it tends to win for larger portfolios.

Trusts still have real advantages: stronger asset protection for vulnerable or very young beneficiaries, more flexibility over who ultimately benefits, and simpler administration for modest sums — a FIC carries the running costs of a real company, with annual accounts, a corporation tax return and Companies House filings. The two are not mutually exclusive: many families use a trust to hold FIC shares, combining the control and tax efficiency of the company with the protection of the trust. We help you weigh the options against your family's actual objectives before any structure is built.

How Acumon Structures and Runs Your FIC

We start with your objectives — who should benefit, when, and how much control you want to keep — then design the share classes, funding route (loan versus share capital) and dividend policy to match, working with your solicitors on the articles and shareholders' agreement. We incorporate the company, deal with Companies House requirements including director identity verification, and register everything correctly from day one.

Thereafter we act as the FIC's accountants: annual accounts, corporation tax returns, dividend paperwork and ongoing planning as circumstances change. Where the company holds UK residential property we review the Annual Tax on Enveloped Dwellings position — charges for 2026/27 range from £4,600 to £303,450 a year for dwellings worth over £500,000 unless a relief applies — and advise on the SDLT surcharges that apply to company purchases.

What You Get With Acumon

• Feasibility review comparing a FIC, trusts and outright gifts for your family
• Share class, control and funding structure design, coordinated with your solicitors
• Company formation and Companies House compliance, including director ID verification
• Annual accounts, corporation tax returns and dividend planning
• ATED and SDLT advice where the company holds UK residential property
• Succession planning as control passes to the next generation

Get a Fixed-Fee Quote

Tell us what you need and we'll come back within one business day with a clear scope and a fixed price — no hourly-rate surprises. Call 020 8567 3451 or use the form and we'll be in touch.