Tributom Advisory
Family investment companies
How a family investment company (FIC) lets a family invest and pass on wealth while the founders keep control, and how we advise on, set up and run one.
What is a family investment company?
A family investment company, or FIC, is an ordinary UK company set up by a family to hold and grow its investments. It does not trade. Family members own its shares, usually in different classes, and the founders, often parents or grandparents, typically run it as directors.
The attraction is the combination. Wealth can be passed to the next generation while the founders keep control of how it is invested and when profits are paid out. Growth in the company's value belongs to the family members who hold shares rather than to the founders' estates, and investment income and gains are taxed inside the company at corporation tax rates.
A FIC is both a planning tool and a governance tool. It gives a family one place where its wealth is held, one set of rules for how it is run and one set of accounts to show for it. Our guide to the benefits and uses of a family investment company sets out the detail.
Why families use them
- Inheritance tax: shares given away fall out of the founders' estates after seven years, so future growth is passed on, while the capital the founders put in stays in their estate until repaid or given away
- Control: voting rights and the board stay with the founders, whatever the split of the economic ownership
- Tax on investment income: income is taxed inside the company at corporation tax rates, and dividends the company receives are generally exempt. Gains are taxed at the same rate, so the saving lies mainly with income and with keeping money invested
- Flexibility: different classes of shares allow dividends and capital to be directed within the tax rules
- Governance: a shareholders' agreement sets the family's rules on dividends, transfers, divorce and succession
- Education: younger family members take part in a real investment company, with real accounts and real decisions
When a family investment company is worth considering
A FIC is usually considered when a family has investable capital it does not need to live on, commonly in the millions, a long investment horizon, and founders who want to reduce a future inheritance tax bill while keeping control. The family should also be willing to run a company, with accounts, filings and regular meetings.
It is usually not the answer when the founders need the income or the capital back, when the sums are modest, when the family wants to hold homes or other assets for personal use, or when it does not want the formalities. Where most of the wealth is in a trading business or in property, the position is different and needs specific advice. Some families use a trust instead, or alongside: see family investment company or trust.
How a family investment company works
- The founders form the company and agree its Articles of Association and a shareholders' agreement
- They fund it, usually with a small amount of share capital and a larger loan from the founders
- Shares are issued or given to family members, in classes that carry different rights
- The directors invest the money, keep the accounts and file the returns
- Profits are retained, reinvested or paid as dividends according to the rules the family has agreed, and founders' loans are repaid as the company has the cash
Our service
Family investment company advice, set-up and accounts
From the first conversation to the annual accounts, in stages with the scope and fee agreed in advance.
Stage 1: Design
- A consultation to understand the family's objectives, investments and existing structures
- Advice on the share structure, the role of trusts, control and whether the company should be limited or unlimited
- Advice on the UK tax consequences of funding the company
- A written report of the recommended structure and its tax consequences
Stage 2: Set-up
- Preparing and filing the incorporation at Companies House
- The first board minutes, share allotments and statutory registers
- Registering the company for corporation tax
- Setting out the agreed share rights and governance decisions that the Articles of Association and shareholders' agreement need to reflect
Stage 3: Handover
- Guidance on dividend policy, profit extraction and repaying founders' loans
- A note of the company's filing and tax obligations, with key dates for the first year
- A review meeting after incorporation
Ongoing: running the company
- Annual accounts and corporation tax
- Companies House filings
- Investment company tax planning and dividend planning
- Regular reviews of the structure as the family and the law change
Our advice covers UK taxation. We do not give investment advice.
Guides
Everything to read before you decide
Plain-English guides from our advisory practice, from the general case for a family investment company to the detail of tax and set-up.
7 min read
Family investment companies: benefits, uses and risks
Family investment companies explained: the benefits, common uses, who a FIC suits and the risks and costs to weigh before setting one up.
7 min read
How family investment companies are taxed
Family investment company tax explained: corporation tax on income and gains, dividends and loans, inheritance tax, and the anti-avoidance rules to know.
4 min read
Family investment company or trust: how to choose
Family investment company vs trust: how they compare on control, inheritance tax, running costs and flexibility, and when families use both.
5 min read
How to set up a family investment company
How to set up a family investment company: design, share classes, funding, Articles and shareholders' agreement, incorporation and the first year.
4 min read
Running a family investment company: accounts, dividends and governance
Running a family investment company: directors' duties, accounts, tax returns, dividends and loans, family reporting and annual reviews.
FAQ
Frequently asked questions
General information as at 26 October 2026, not tax, legal or investment advice. Tax rules and rates change, and a family investment company should only be set up on advice for your own circumstances. Tributom Advisory advises on UK tax and does not give investment advice.
Talk to a partner about a family investment company.
A short conversation is the quickest way to find out whether a family investment company suits your family. Every enquiry is read by a partner before we reply.
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