Bloomsbury Professional Tax Insight: Family Investment Companies, 2nd Edition

Author: Deborah Clark
Publisher: Bloomsbury Professional (formerly Tottel Publishing)
ISBN: 9781526524690

Previous Edition ISBN: 9781526512574
Published In: May 2024
Format: Paperback , 96 pages
Jurisdiction: U.K. ? Disclaimer:
Countri(es) stated herein are used as reference only

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Description
Contents

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Covers the key issues to consider when exploring if a Family Investment Company is an appropriate vehicle to help with an individuals estate planning.

An updated version of the Tax Insight on Family Investment Companies published in 2019. Written by an acknowledged expert in this field, Deborah Clark of Mills and Reeve, this publication explores what makes a company a FIC, considers how a company works and the potential ways to make them more bespoke.

A Family Investment Company (FIC) is a bespoke vehicle which can be used as an alternative to a family trust. It is a private company whose shareholders are family members. A FIC enables parents to retain control over assets whilst accumulating wealth in a tax efficient manner and facilitating future succession planning. The commentary covers issues on how to fund the structure, what tax issues to watch out for, what rights you might give to the shares and the pros and cons of different choices. It deals with directors' powers, the use of an unlimited company and issues around privacy and wealth protection. Different structures are explained and their benefits and disadvantages highlighted.

The commentary is bought up to to date with the new corporation tax rate and dividend tax rates introduced since the previous edition was published. It also reflects the author's continued practical experience in dealing with clients in this area.

New features include:

a new chapter on Estate Planning Benefits
a new chapter on Treatment on Divorce
enhanced coverage of redeemable preference shares in the chapter on share capital
an expanded shareholders agreement chapter to include more information on what should be included in the agreement
a new chapter on share valuations
a new chapter on accounts preparation for Family Investment Companies

The guidance given is supplemented by examples and diagrams to helpfully illustrate the concepts described.

1. Introduction
2. Articles of Association:
2.1 Long or short form 2.2 Bespoke clauses: 2.2.1 Directors - meetings, appointments 2.2.2 Share transfers 2.2.3 Dividend payments
3. Share capital:
3.1 What is a share - voting, income and capital rights 3.2 Types of shares 3.2.1 Ordinary 3.2.2 Redeemable 3.2.3 Preference 3.2.4 Growth 3.2.5 Loan stock 3.3 Valuation issues
4. Shareholders Agreement:
4.1 Legal status 4.2 Purpose of FIC 4.3 Interaction with Board 4.4 Standard clauses
5. Taxation:
5.1 Taxation of the FIC 5.2 Taxation of shareholders
6. Funding:
6.1 Cash subscriptions 6.2 Sale of assets 6.3 Share exchanges 6.4 Gifts 6.5 Loans 6.6 Dividends from a trading company
7. Governance:
7.1 Directors' meetings 7.2 Use of committees 7.3 Shareholder meetings
8. Protection:
8.1 Types of risks 8.2 Impact of divorce on shareholder
9. Privacy & reporting:
9.1 Limited or unlimited 9.2 Reporting at Companies House
10. Winding up:
10.1 Process 10.2 Tax considerations
11. Example structures:
11.1 Simple structure 4 shareholders, ordinary shares, 25% each 11.2 Including a trust in the structure 11.3 More complex structure with redeemable preference shares 11.4 Structure with voting and non-voting shares 11.5 Structure using growth shares 11.6 A FIC with shares in a trading company