Traditionally, the most popular option for families looking for a tax efficient way of passing wealth down through the generations has been the use of discretionary trust structures.
However, various recent developments, particularly the current low corporation tax environment (set against a 20% inheritance tax charge on transfers into discretionary trusts above the nil rate band) have seen a rapid growth in the use of family investment companies, commonly known as FICs.
While a FIC will be an important consideration for those looking at wealth management issues, any decision to use a FIC should be made after careful consideration of not just tax issues, but also wider issues relating to company law, family law and estate planning.
David Webster looks at some of those wider legal and structural concerns in FTAdviser.
Understanding the use of family investment companies is available to read on the FTAdviser website.