Family investment company advisors
Blake Morgan’s expert corporate and private client solicitors combine to create, restructure and advise on family investment companies.
Family investment companies are becoming popular as a tax-efficient alternative to trusts for preserving and passing on family wealth. These non-trading companies confer varying rights on family members that enable a tailored approach to how wealth passes down the generations.
They can be used for business planning where excess funds in a trading company can be lent, thereby retaining valuable Capital Gains and Inheritance Tax reliefs. Clients also use them for retirement planning, providing income for the next generation and funding school and university costs.
Main Areas Of Practice
Our teams of specialist personal and corporate tax, trust, Wills, family and corporate solicitors combine their expertise to provide advice on whether the creation of a family investment company (FIC) is the right structure for our clients. In particular we will:
Advise on the tax advantages and disadvantages
In certain circumstances, it is possible to establish a FIC without paying any immediate tax charges. However, careful consideration is needed where family members require regular income and/or substantial capital funds from the company. Our corporate and personal tax specialists work closely to establish the best outcome.
Work with the family to ensure the right fit
When creating a FIC, we consider the wider issues. A balance is needed between mitigating tax and what happens to a family member's shares on divorce, bankruptcy, losing mental capacity or death. Our specialists can prepare Pre-nuptial Agreements, Shareholder's Agreements, business Lasting Powers of Attorney and Wills to safeguard the family's wealth.
A FIC may not be for everyone and the main alternative is a trust. Our specialist team can work with you and your accountant to decide what options are available to fulfil your financial and personal objectives.
A number of wealth managers and accountants introduce their clients to us for help in this area, typically in the course of exiting their businesses.
"They are big enough to offer a complete legal service while maintaining a personal connection with their clients," observes an interviewee.
- Chambers High Net Worth, 2020
We advised on the creation of a family investment company for a client who inherited a property and share portfolio from her mother's estate, who continued to receive dividends from the company. Over the years she transferred her shareholding to the children by way of a gift. On her death, as she had survived the gift of the shares by seven years, there was no inheritance tax payable. The children retained the company structure for the grandchildren and minimised the Inheritance Tax payable on their respective deaths.
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