George Green LLP Welcomes Two New Family Solicitors to Sutton Coldfield Office
George Green LLP is thrilled to announce the expansion of its Family Law team with the...
George Green solicitors have worked to deliver a tax efficient solution to preserving a family’s wealth through a Family Investment Company (FIC).
Do you have clients who wish to achieve any of the following objectives?
• Protect their family’s assets and generate wealth in a tax efficient environment.
• Reduce the family’s exposure to Inheritance Tax (IHT) with the potential to pass wealth on to successive generations of children and grandchildren.
• Retain control of their assets over the short to medium term.
• Income generation for children and grandchildren (current and future).
Why use a Family Investment Company and how does it work?
• A bespoke investment vehicle which could be used as an alternative to a family trust.
• A company is set up where the older generation (the wealth creators) retain control of the assets through the rights attached to their shareholdings with the younger generation being able to benefit from income derived from the assets and accumulation of wealth.
• Typically alphabet shares are used with the older generation holding a different class to the younger generation.
• Income generated within the company is subject to Corporation Tax at the current rate of 19%.
• Capital Gains Tax rates are also charged at 19%, which is lower than the rates charged on individuals.
• Dividends received by another company are exempt from Corporation Tax, so these can be received tax free within a FIC. Dividend rates for individuals can reach 38.1% and individuals now only benefit from a small dividend annual allowance of £2,000.
• As the company is owned by various shareholders, only the value of the relevant participant’s shareholding will be included in the estate, so it is far more beneficial than holding all of the assets personally and paying IHT in full on appreciating assets.
If you or your business require information regarding anything in this blog or generally about your business or any other corporate matter, please call Sarah Ward, one of our Corporate partners, on 07889 589596 or e-mail Sarah at sward@georgegreen.co.uk for advice and assistance.