Family Investment Companies

Assisting Family Investment Companies with Discretion and Integrity

Bespoke corporate vehicles are often used as an effective alternative to other fiduciary structures.

With the UK tax treatment of trusts becoming more complex and not as attractive, the attraction of family investment companies as a vehicle to pass assets onto the next generation is increasing.

Family investment companies are bespoke corporate vehicles that rely on the creation of multiple share classes carrying pre-defined economic and voting rights. Separation of the various rights to vote, rights to participate in capital and income, means that families can provide the next generation with participation in the current and future asset value, whilst maintaining control of their management.

For families who are tax resident in the UK, and for whom the creation of a traditional trust structure would result in charges for inheritance tax, the use of a family investment company can be particularly attractive. Properly structured, transfers of value to the company are usually considered to be potentially exempt as such that no inheritance tax is payable provided the donor survives seven years. The company must be tax resident in the UK, which is usually achieved by having most directors in the UK therefore, its profits will be subject to the UK corporation tax regime. Dividend income though is often tax free.

The use of a Jersey company and experienced service provider provides the following benefits:

No tax is payable in Jersey on income or capital gains
There is no requirement to file annual accounts, although accounts must still be prepared
Shares in a Jersey company are not considered to be a UK situs asset
Gains access to highly regulated service providers experienced in international matters
Tax efficient wealth planning
Parents retain control of investment strategy
It provides increased flexibility if the family decides to leave the UK
Privacy compared to a UK company as no public listing of officers and shareholders
Ability to roll up income and gains having paid only corporation tax

Forward Group have a highly experienced team assisting some of the world’s most discerning families with the creation and administration of innovative and effective estate planning solutions with the utmost discretion and integrity.