Sofia Thomas and Sharon Dosanjh consider the role that family investment companies can play in passing down generational wealth in a tax efficient manner
Family investment companies (FICs) are becoming increasingly popular in today’s age. It was announced in August that the specialist unit formed by HMRC to investigate family investment companies has been disbanded, having found no evidence to support the claim that the vehicle was being abused as a means of avoiding tax. HMRC found no correlation between the individuals who had set up family investment companies and tax avoidance.
Of course, this doesn’t mean that HMRC cannot open an investigation into this vehicle again in the future. However, the findings of the investigation are reassuring, showing that the family investment company is a useful and legitimate tool for passing down generational wealth in a tax efficient manner.