This is because of the more beneficial corporation tax rates which a company pays, compared to the trust income tax rates.
FICS can be used alongside trusts or on their own, as a tax efficient way of protecting assets and passing wealth on to family members. We are able to advise on whether a FIC may be right for your circumstances and how these structures work.
A FIC is essentially a UK resident company, whose shareholders are various family members, and sometimes family trusts. Our specialist team work with tax advisors to establish the best structure for you to use, taking into account your circumstances.
The FIC can be set up as an unlimited or limited company and we can advise you on the right approach for you. Usually, the founder of the FIC will either gift or loan assets to the company and the family members, including the founder, will receive shares in the FIC. Different classes of share can be issued to create flexibility as to (a) distribution of income and assets and (b) retention of control of the FIC by the founder. It is therefore vital that the FIC has a detailed shareholders agreement and/or articles of association to provide for this flexibility and control, as well as to ensure shareholders are only family members.
The assets introduced will usually be non-business related assets and can include cash, property, equity securities (i.e. shares), artwork and even classic cars.
There are a number of benefits that an FIC can provide over other tax planning vehicles, including:
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Myerson’s expert team can advise you on your estate planning, and identify whether or not an FIC would be a suitable vehicle for you. If so, we can ensure that you understand how the FIC will work in practice, that the FIC is set up in the most suitable way and prepare all necessary documentation in this regard.
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