If you’re into taking care of your assets in a good enough way, and passing it on to the next generation, here’s what you need to do: make sure you’re giving a thought to Family Investment Company (FIC). The best part about this is that you can prevent transferring your shares outside your family. The FIC allows you to mold the articles according to your circumstances, that’s the main reason for retaining all your family assets within your family.
If you’re going for a trust option, know that it’s the best option for you. Having an IHT threshold of £325,000 per individual is another way, but you’ll have to pay your taxes that way. Assets worth more than that are subject to an immediate IHT charge. If you’re looking forward to finding out more about Inheritance and its terms and condition, know more here.
Pros and Cons of Choosing FIC
Do you know what’s the best part about Family Investment Company? Well, you’ll not be charged any IHT tax. How cool is that? But there’s a downside to this too. When you’re going for FIC, know that someone is supposed to be the owner of the shares. However, a trust can have beneficiaries that are yet to be born. Let’s understand this by a clear example. Marrie wants to transfer all her assets to her grandchildren. She’s constantly looking for options and sees two options clearly. A- She’s really attracted by FIC but the fact that her grandchildren are yet to be born makes her rethink her options, and she finds out that she can transfer her life savings to her grandchildren through trust. She has to pay tax, as the worth of her assets is more than £325,000 per individual.
Set Up a Family Investment Company
The method of setting up a Family Investment Company (FIC) is the same as any other company with shares. The only main difference is between the designation of those shares.
Hope you’ve understood the terms and conditions of FIC. What are the main pros and cons and you’ll make your decision more wisely and consciously while taking your condition into account?