Setting up a family investment company (FIC)

Setting up a family investment company (FIC)

1. 1

   Is a FIC worth it for you?

   Often yesSignificant capital to invest long term, income not needed now, you want control and to pass growth to children.

   Often noSmaller sums, you need the income, or you want to move existing properties with big gains — costs and transfer tax can outweigh the benefit.
2. 2

   Design the shares

   Parents usually keep voting shares (control); children get growth or non-voting shares. Different classes let dividends go to different people.

3. 3

   Write the rules

   Articles and a shareholders' agreement: family-only ownership, forced transfers on divorce, death or bankruptcy, who can be a director.

4. 4

   How will you fund it?

   Loan from the parentsRepayable tax-free. Stays in your estate, but growth builds in the children's shares.

   Gift of shares or cash to childrenA PET — out of your estate after 7 years. Don't gift straight to the company: that's a chargeable transfer.

   Move existing property inTreated as a sale: capital gains tax plus stamp duty with the 5% surcharge.
5. 5

   Children under 18

   Dividends over £100 a year from shares a parent gave are taxed on the parent. Many FICs pay children nothing until 18 and let value build.

6. 6

   Buy and let

   Company mortgage (often with personal guarantees). Let commercially to unconnected tenants to keep the 19% small profits rate — letting to family can mean 25%.

7. 7

   Every year

   Accounts and confirmation statement at Companies House, identity verification, corporation tax return, ATED return for homes over £500,000.

   ⏱ Every year

8. ✓

   Get it designed properly

   Ask Wala to explain the rules, then have a tax adviser and solicitor set it up before any money or property moves.

Checked against official sources on 10 November 2026 · General information, not legal advice · landlordwala.com/diagrams/family-investment-company