Family Investment Company (FIC) could be the next step you take when it comes to tax planning. Things can be confusing, such as taxes that you'll encounter when buying a property through it. Will the tax rates differ, or have they introduced a different tax for it?
Well, we can know more about all these below:
What is Family Investment Company?
A Family Investment Company (FIC) is a UK-resident private company whose shareholders are typically entirely comprised of family members. Usually, they are established by older generations seeking to protect family assets and transfer wealth to their future generations. Such assets may eventually be seen as lifetime gifts, even though they still want to benefit from the income.
There is no legal definition of an FIC, and FICs are not subject to special rules.
Taxes You Will Pay
Stamp Duty Land Tax (SDLT)
SDLT is a tax you pay when buying property or land in England and Northern Ireland. It may be the first tax you deal with when buying a property in the UK through a FIC. Being a one-time tax based on the purchase price, SDLT may seem like a lesser tax; however, it reveals a different additional rate for non-residents.
The following rates and thresholds apply to the acquisition of residential properties in the UK:
Portion of Property Price | Standard SDLT Rate | +5% Company Surcharge |
|---|---|---|
Up to £125,000 | 0% | 5% |
£125,001 to £250,000 | 2% | 7% |
£250,001 to £925,000 | 5% | 10% |
£925,001 to £1.5 million | 10% | 15% |
Over £1.5 million | 12% | 15% |
Note
- Stamp Duty Land Tax (SDLT) is charged at a Flat 17% on residential properties costing more than £500,000 bought by companies.
- Where a company purchases six or more residential properties in a single transaction, the acquisition is subject to non-residential (commercial) SDLT rates rather than the higher residential rates.
If the property is non-residential (Commercial), the following rates will apply:
Chargeable Consideration (Purchase Price) | SDLT Rate |
|---|---|
Up to £150,000 | 0% |
£150,001 to £ £250,000 | 2% |
Above £250,000 | 5% |
Annual Tax on Enveloped Dwellings (ATED)
ATED is a UK tax payable by companies that own a UK residential property worth more than £500,000. The same applies when you buy a property through Family Investment Company. The charges payable depend on the valuation of the property, as follows:
Chargeable Amounts for 1 April 2025 to 31 March 2026
Property Value | Annual Charge |
|---|---|
More than £500,000 up to £1 million | £4,450 |
More than £1 million up to £2 million | £9,150 |
More than £2 million up to £5 million | £31,050 |
More than £5 million up to £10 million | £72,700 |
More than £10 million up to £20 million | £145,950 |
More than £20 million | £292,350 |
However, residential properties will qualify for relief from ATED charges if they are let out to unconnected third parties for commercial purposes, property development, or property flipping, among other uses.
Conclusion
Buying property through a Family Investment Company (FIC) can be a smart move for long-term planning, but it comes with upfront tax implications. You’ll pay higher Stamp Duty Land Tax (SDLT), including a possible 17% flat rate for certain properties over £500,000. If the property is residential and worth over £500,000, ATED charges may also apply yearly, unless you qualify for relief by letting it or using it for development.
Plan carefully and seek advice to manage these costs and claim any exemptions.
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- List of MTD Benefits Beyond Just HMRC Compliance - 26 January 2026
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