When it comes to managing and preserving family wealth, more families are turning to Family Investment Companies (FICs) — not just for tax efficiency, but for the control and protection they offer.

In this article, we explore how an FIC can be structured to shield family assets, manage generational transfers, and futureproof against tax or legal threats — making them an increasingly popular alternative to family trusts.

What is a Family Investment Company?

A Family Investment Company is a private limited company typically set up by parents or founders to hold and grow wealth while maintaining control over how and when that wealth is distributed. It’s often used as an alternative to a discretionary trust, offering greater flexibility and more favourable tax treatment in certain circumstances.

You can read our introduction to FICs here and our guide to setting one up here.

Why families use FICs for protection

One of the key attractions of a Family Investment Company is the ability to ringfence wealth from personal risks and life events. Here’s how:

1. Protection from divorce or bankruptcy

Shares in the FIC can be structured to limit what a beneficiary (e.g. an adult child) actually owns. For instance, giving non-voting shares means that while a child may benefit from dividends, they don’t have direct control over the company — making it harder for an ex-spouse or creditor to access those assets.

2. Control over asset use

FICs allow parents to retain control as directors, while gradually transferring economic value through share structures. This is ideal for families who want to provide financial support to children without giving them unrestricted access to capital too early.

3. Reduced exposure to inheritance tax

FICs may help reduce Inheritance Tax (IHT) liability by removing value from the founders’ estates. While they do not qualify for Business Property Relief, planning techniques — such as gifting shares or making loans to the company — can still be effective over time.

Share structures: Control without ownership

The share structure of a Family Investment Company can be tailored to suit your family’s needs. Shares can be split into different classes — each with specific rights to income, voting, or capital — allowing you to:

• Keep voting control with parents
• Pass on income rights to children
• Retain capital for future generations

This flexibility is often more nuanced than what’s possible with a traditional family trust.

Comparing FICs to family trusts

While both structures aim to pass on wealth, the FIC offers:

• Greater transparency and corporate governance
• More structured control over distributions and ownership

Trusts still have a place in estate planning — particularly where privacy is key or where beneficiaries aren’t yet born — but for many families, the FIC offers a compelling modern alternative.

Final thoughts

A well-structured Family Investment Company can do far more than save tax. It can help safeguard assets, ease generational transitions, and ensure your family wealth is used wisely and protected for years to come.

Whether you’re already considering an FIC or exploring your options, speak to our team at Geldards to discuss how this structure could support your family’s long-term goals.