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Family investment companies are used as an alternative to a trust to help maintain control over possessions. This private company is made up of shareholders who are family members. This is set up to accumulate wealth in a tax-efficient manner. Therefore ensuring family futures are supported and well maintained. Individuals with large amounts of properties and wealth may consider using a family investment company as part of their IHT planning strategy. With any family business, the directors are the same as the shareholders. It’s unlikely that your company will attract inheritance tax relief due to its investment activities. If a loan is given this will give away any capital appreciation.

If you interested and want to find out more, please feel free to get in touch today with our team here at CBHC for expert insurance brokers Chelmsford.

Family Investment

Family investment companies are formed with the suitable family members, providing loans by subscribing for shares. Over time these shares are paid to other family members. No tax arises if the relevant shareholders endorse the correct shares. The company can invest in both residential and commercial properties. Once the company is approved and gone limited the individual can transfer assets such as money, properties or investments to the loan funds of the company or the company itself. The cash transferred originally has no tax added on the initial loan of funds, but please bear in mind that capital gains could rise based on the difference of the original costs and the present value of the money. Additionally, if a property is transferred then the same issue will arise if the resources sold on loan were stakes.

UK Unlimited Company

The family investment business is set up as a UK unlimited company. An unlimited company will not have the same protection as a limited company, claims will be taken against the company as assumptions suggest that the stocks in the company are investments and not property. This small limited company consists of less than 50 employees and will have an annual turnover of less than £10.2m, there will be no audit requirement. In addition, you will find that both corporation tax and capital gains are chargeable to 19%. In April the rate of corporation tax will fall to 17%, whilst capital gains have already been reduced from 20%.


Here at CBHC take pride in our excellent customer service and go about and beyond the traditional accountancy remit to support you in your next business venture.  Our expert knowledge and professional advice can really help you when setting up your company. Locally we are the trusted choice of insurance brokers Chelmsford. Get in touch with our team today to find out more about Family investment companies.