HMRC have recently concluded what they describe as research into the use of FICs by the Family Investment Company team, and concluded that there is no need for a specialist unit at all. This has been disbanded and all FICs will, in future, be dealt with via HMRC’s normal corporate channels.
As part of their research HMRC undertook a detailed review of several FICs and their associated trusts/shareholders using information contained on HMRC systems. A number of FICs were also contacted in writing to gain additional insight to inform the research findings.
Part of the HMRC team’s remit was to investigate areas of tax risk associated with FICs and if there was a correlation between those who operate FICs with evidence of non-tax compliant behaviours. However, HMRC has concluded that the use of FICs appears to be a planning strategy, often with the primary objective of generational wealth transfer and mitigation of Inheritance Tax.
If you would like to know more about FICs and how they compare with the more traditional trusts please read our trusts v FICs article here
To find out more about what we do, please get in touch.