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Family Wealth Planning
Setting Up a Family Investment Company with Companies House
Looking to protect property wealth and pass it on tax-efficiently, without losing control? A Family Investment Company (FIC) could be the perfect structure. Ideal for families and high-net-worth individuals, FICs let you manage investments under a company, gift future growth to your children, and reduce exposure to Inheritance Tax.
At UK Property Accountants, we deal in FICs structures specific to your property. Right from company formation through to tax planning, shareholder agreements, and ongoing compliance, we ensure your FIC is both legally sound and built to last.
Your Wealth, Our Expertise
Why Choose UKPA for Setting Up a Family Investment Company?
Our ROE experts regularly advise international clients on UK land law and maintain close links with Companies House and HM Land Registry practices.
Property-Focused FIC Specialists
Our property FIC experts come with in-depth knowledge of tax, structuring, succession and estate planning. We help you create a vehicle that supports both control and legacy.
Built for Families with Complex Needs
We have helped individuals and families with property portfolios, trusts, or long-term wealth management in mind to manage wealth across generations.
End-to-End Service
From forming the FIC, structuring share classes, drafting shareholder agreements, advising on tax, and ensuring compliance with Companies House and HMRC, we take care of it all.
What our clients say about us
Testimonials
Rendering the best service with a team of qualified and regulated accountants and tax advisers.
From Founder to Legacy
How an FIC Helps You Build, Grow and Pass on Wealth
Our services continue even after setting up family investment company, to help you stay compliant and manage your UK property effectively.
Set Up to Succession
What We Offer
Whether you're setting up a Family Investment Company in UK or managing an existing one, we provide end-to-end support from incorporation and tax registration to ongoing compliance, property planning, and wealth succession.
Property FIC Setup
We register your Family Investment Company with Companies House, draft bespoke Articles of Association that include protections for property assets, and issue initial share capital detailing tailored share classes with custom voting, capital and dividend rights.
Converting an Existing Company to an FIC
We reclassify shares, amend Articles of Association by special resolution, and issue new share classes, handling all Companies House filings, board minutes, and relevant tax elections.
Asset Transfers & Property Valuation
We draft property transfer agreements, calculate and apportion SDLT, SDRT, and CGT, & prepare RICS-compliant valuations using comparable evidence, net assets & cash flow models, ensuring defensible figures for HMRC and future disposals.
Statutory Filings
We prepare FRS 102-compliant accounts with property schedules, file CT600 returns with detailed tax reconciliations, submit Confirmation Statements, and maintain your statutory register.
Tax Registration
We complete the CT41G form and register your company for Corporation Tax, set up PAYE and CIS (if required), and manage VAT registration and MTD compliance where applicable, especially for commercial or mixed-use properties.
Property Tax Planning
We offer customised advice to optimise mortgage interest relief under Section 24, time property disposals to minimise Capital Gains Tax, and structure share transfers to reduce potential Inheritance Tax liabilities.
Keeping Your FIC Legally Sound
What Ongoing Compliance Does a Family Investment Company Require in UK?
These are the annual obligations that a Family Investment Company must meet to comply with the regulations:
A CT600 tax return must be filed with HMRC annually within 12 months of the year-end, reporting the company’s profits and any tax due. Corporation Tax must be paid within nine months of the year-end to avoid penalties or interest.
By law, the company must maintain up-to-date registers of directors, shareholders, and charges over company assets for as long as the company is active and retain these registers for at least six years after dissolution.
Whenever the company pays dividends, it must provide formal dividend vouchers that show the amount, date, and recipient. The share register must also be updated to reflect any changes in ownership or share structure.
Case Study
How the Parkers Used an FIC to Protect £2M from IHT
When John and Anna Parker walked into our office, they were juggling two big worries: how to keep control of their hard earned savings and how to pass on wealth to their children without a hefty 40% Inheritance Tax bill looming over their heads. In their early 60s and with £2 million earmarked for UK property, they wanted a simple, tax‑efficient plan. We recommended a Family investment company.
Here’s how we set it up, step by step:
Step 1: Share Structure
- A Shares: John and Anna subscribed 2,000 “A” shares at £1 each, giving them 100% of the voting rights on £2,000 of equity.
- B Shares: A second class of B shares was created to capture all future dividends and capital gains, but with no voting power.These would eventually be gifted to the children.
Step 2: Funding the Purchase
- The Parkers loaned £2 million to the FIC on commercial terms.
- As the purchase was funded by debt, the company’s net assets at incorporation were only £2,000, representing the subscribed A shares.
Step 3: Gifting Growth Shares
- Each B share was valued at £4, reflecting the low net asset value of the company at that time.
- John and Anna gifted 50 B shares worth £200 to their son and 50 B shares to their daughter, well within the £250 per person annual IHT exemption.
- No IHT, no reporting, no complications for children.
Step 4: Tax-Free Wealth Extraction
- Rental income generated by the property is used to repay the £2 million shareholder loan.
- These repayments are treated as a return of capital, not income, so John and Anna receive them entirely tax-free.
- Over time, as the loan is repaid and the property appreciates (assumed at 3–5% annually), the FIC’s net assets will gradually increase.
- After 10–12 years, the property could be worth around £3 million, with no liabilities, making the net assets of the FIC worth £3 million, fully represented by the B shares held by the children.
By structuring the FIC in this way, John and Anna receive their full £2 million back tax-free. Meanwhile, their children benefit from the entire future growth, potentially over £1 million outside the parents’ estate, with no Inheritance Tax.
The Parkers maintain full control while securing a tax-efficient legacy. Had the Parkers held the property personally, their children could have faced an IHT bill of £ 800,000 (40% of the £2m+ growth). Using the FIC, this is reduced to £0.
Life’s Milestones
No matter where life takes you, your FIC adapts
At every milestone, setting up a Family Investment Company UK helps you protect, grow and transfer wealth. Here’s how we shape your structure around the moments that matter:
Wealth Accumulation
“I’m building my portfolio, how do I keep more returns working for me?”
Corporate rate taxation on rental income and gains lets you reinvest a larger share of profit each year, so your assets grow faster inside the company.
Family Expansion
“We’re welcoming new family members. What’s the plan for passing on wealth?”
Issue growth shares to children or dependents as they arrive, ensuring they benefit from future asset appreciation without altering your current control.
Business Exit or Sale
“I’ve sold a property or business, where should the proceeds go?”
Channel sale proceeds into your FIC to lock in current value. You retain voting control while the capital compounds tax-efficiently under one corporate umbrella.
Retirement Planning
“My retirement is coming; how do I maintain income and legacy?”
Plan dividend schedules from the FIC in conjunction with your pension drawdown to smooth your income and maintain asset value for the next generation.
Estate Transfer
“I want to make sure loved ones are cared for tax-efficiently.”
Progressive gifting of growth shares freezes today’s value and moves only future appreciation out of your estate, dramatically cutting potential IHT.
Divorce Settlement
“I need a clear, fair split of shared assets and a fresh start.”
With tailored share classes, you can restructure ownership cleanly, preserving your future wealth while meeting settlement or divorce requirements.
Our Process
How We Work
Our work is centred around efficiency, collaboration, and delivering exceptional results to our clients.
Initial Discovery Call
We start with a straightforward process. Answer a few simple questions to help us understand your circumstances. It’s hassle-free, quick and designed to save you time.
Data Gathering and Analysis
Once we have the details, our team of experienced accountants gets to work. You can trust us to manage the complexities and ensure everything is accurate and compliant.
Thorough Review & Timely Submission
We conduct a meticulous review to ensure accuracy, compliance, and completeness in every submission. Our streamlined process guarantees timely submissions, so you never miss a deadline.
Ongoing Support
Our commitment extends beyond accounting and tax advisory work. We provide ongoing support, including tax planning and addressing accounting queries throughout the year.
Related Services
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We are committed to helping you achieve financial prosperity while optimising your tax position in the most effective and efficient way possible.
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FAQs
General queries by our clients related to Setting Up a Family Investment Company in UK are answered here.
Think of an FIC as a private company that holds family assets, such as cash, shares, or property, under one roof. You move your assets into the company and set up different share classes, such as voting shares for yourself, growth shares for your children, and transfer the assets accordingly. By doing this, you effectively freeze today’s value in your controlshares and gift only the future growth to the next generation.
If you’ve substantial wealth and want to maintain control while sharing growth tax efficiently, a FIC is worth considering. You can gift future growth to children (and it’s IHT-free after seven years) while still retaining control. Just be ready for the setup and annual paperwork, it’s more admin than personal ownership.
Your FIC pays Corporation Tax on profits (such as rent, dividends, and gains), and then you pay Dividend Tax when the money is distributed. Capital gains within the company are also taxed at the company rate. The big win is that only the value of your shares, not the assets themselves, hits your estate for Inheritance Tax.
Absolutely. You transfer a house or commercial building into the company at market value, get a RICS valuation for SDLT/CGT, and the FIC collects rent and handles costs. It centralises everything neatly and keeps the property inside the corporate wrapper for planning benefits.
Yes, just like any limited company. Your FIC can take bank loans or overdrafts, secured against the company assets, use director loans with care around repayment deadlines of within nine months of the end of the company’s accounting year, or even lend between group companies if you have multiple vehicles. Always record loans in board minutes and agreements to avoid surprise tax charges.
Have more questions? Check out our Complete Guide for everything you need to know about Setting Up a Family Investment Company.
UK Property Accountants is a leading firm of chartered certified accountants and chartered tax advisers specialising in the property and real estate sector with head office in Central London.
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