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Family affair
Key points
- Establishing the value of shares with voting rights only can be challenging.
- Placing shares in a family investment company is a tax-efficient way of gifting them but retaining control.
- The right shareholding structure must be set up at the outset so that transfers of value can be potentially exempt from inheritance tax.
- Family investment companies pay the normal rate of corporation tax.
A freedom of information request recently revealed that in April 2019 HMRC set up a ‘secret unit’ to look at how family investment companies (FICs) are being used in inheritance tax planning. It is no surprise that HMRC is looking closely at these structures which are fast becoming the wealth holding vehicle of choice for many UK-based high-net-worth families but it reminds us that...
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