Family investment companies

In recent years the family investment company has been heavily promoted as a natural alternative to the use of trusts in the context of inheritance tax planning. Although various tax changes in 2006 limited some lifetime planning trusts can complement and benefit such vehicles resulting in substantial tax mitigation as well as providing flexible wealth preservation.

Such savings can extend to both capital gains tax and stamp duty land tax (SDLT) in addition to other taxes and consequently there is a strong argument that advisers should look carefully at the potential importance of this key partnership between the two arrangements. As we will see in the case study of the Wiseman family this multi-layered strategy may prove attractive for various reasons providing far greater flexibility and less reliance on a single investment wrapper which is increasingly...