The FIC structure allows family assets to be passed onto the next generation while retaining some element of protection over those assets. The FIC provides protection for parents and children.
FICs can registered as limited or unlimited companies, however they do not hold any special status under the Companies Act 2006 or receive any superior tax treatment[1]. FICs can be incorporated in the UK or offshore if required.
If a child is married or in a civil partnership a possible concern for the parents transferring valuable assets into the FIC is a future relationship breakdown of one of their children and the assets of the FIC forming part of a divorce or dissolution.
The courts have established a company is legally separate from its shareholders[1]. In Petrodel Resources Ltd v Prest a review of the principles that a court may interfere with the legal concept of a company is separate from its members a doctrine referred to as ‘piercing the corporate veil[3]‘, to pierce the veil means disregarding the separate personality of a company.
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