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FAMILIES ARE USING FAMILY INVESTMENT COMPANIES TO SIDESTEP DEATH DUTIES 12:22, 30 May 2025 UK households are increasingly turning to company structures to avoid inheritance tax entirely.

This is done by Family Investment Companies (FICs), which can be used to legally sidestep death duties by handing down millions to children through a company. Now, accountants and lawyers

are reporting more families using FICs, especially in the wake of Chancellor Rachel Reeves already confirming plans to bring untouched pension pots into the inheritance tax (IHT) net from

April 2027. READ MORE: FULL LIST OF NATWEST BANK BRANCH CLOSURES IN JUNE AS 53 SHUTTING DOWN IN 2025 The Office for Budget Responsibility now predicts 10% of deaths will trigger an IHT bill

by the end of the decade, rising from the historic average of around 4%. Current rules dictate that estates worth more than £325,000 face a 40% IHT charge, rising to £1 million for couples

who pass on the family home to their children. Article continues below However, for those using FICs, they are able to gift company shares instead of cash or assets directly. Nick

Sinclair-Wilson, of BRI Wealth Management, said: “There has undoubtedly been an uptick in demand” for FICs. FICs are used by wealthier families whose financial freedom allows for more

flexibility when it comes to using traditional trusts. Chris Etherington, of tax advisory firm RSM, added: “FICs can replicate some advantages of a trust by allowing assets to effectively be

gifted to family members through the shares and loans, while retaining control during the parents’ lifetime. “From an inheritance tax perspective, this is efficient, as it can remove value

from the parents’ estates, which might otherwise be subject to 40% inheritance tax.” David Denton, of Quilter Cheviot, also said: "No lifetime inheritance tax charges arise on

transferring sums, irrespective of the value transferred,” he explained. “Sums held within the FIC are outside of the founder’s estate for inheritance tax purposes, so provided the founder

survives for seven years from creating the FIC, amounts held within it will escape inheritance tax on their death.” Join our dedicated BirminghamLive WhatsApp community for the latest

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