Traditionally IHT planning was centred upon the use of trusts, however the 2006 budget which ushered in sweeping changes to the IHT treatment of trusts resulted in alternative structures being sought to give away assets and still retain a modicum of control.
The family investment company (FIC) has become increasingly popular as corporation tax rates were set at a modest 19% of profits from 1 April 2015 to 31 March 202313, where a single rate of corporation tax applied to all companies.
The main features of an FIC (as opposed to a family trading limited company) are centred around the specific requirements and estate planning objectives of a single family. The FIC is established to hold investments (as the name suggests) which can include residential and commercial property, investments such as listed shares, corporate bonds, gold, silver and equities, the FIC is only restricted in its investment choice by any limitations imposed by law, for example a company cannot establish an individual savings account.
Another prominent feature of an FIC is the company will have normally adopted bespoke articles of association that include restrictions on specific rights.