Vip owns a public sector business that deals in Post Office products, services, and staff development. When he initially approached TLPI, Vip was looking at long-term investment strategies and structures that would facilitate further investment opportunities in the most tax efficient way.
Whilst Vip already holds a few properties, he was open to making further investments via a different set-up to improve his tax position. This would also ensure his future investments were ring-fenced and protected from excessive Inheritance Tax liabilities for his son, should the worst happen.
The Situation and Goals
Vip had already been making property investments before he started working with TLPI. Going forward, however, he felt there must be a better way to hold and protect his assets, whilst minimising the tax bill on them.
He started his initial search with his son’s future in mind – how could he continue to make profitable investments which he could pass through his family without racking up a large tax penalty?
Overall, Vip was looking for a solution that achieved the following goals:
- To make long-term investments in a tax-efficient manner
- To ring-fence these investments and retain total control, whilst ensuring they are protected for his son
- To grow his investment property portfolio
“The Family Investment Company was totally new to me. I wasn’t aware of it at all before speaking to TLPI.”
TLPI’s aim is to understand an individual’s situation through an initial free consultation which covers what the client is trying to achieve and how we can remove the pain points taking up their time, energy, and resources.
Vip and his son had multiple conversations with their TLPI consultant, in which Vip was able to discuss any uncertainties he may have had. “We were a bit unsure on how to progress with it, but our consultant helped us both to understand. He explained the benefits of the Family Investment Company and how TLPI would help us with our journey,” Vip recalled.
Working with our clients, we aim to:
- Understand their personal situation
- Apply expertise and knowledge of over one thousand tax benefits and subsidies available to company directors
- Provide the knowledge and understanding needed to make informed decisions about ALL their wealth assets and options
- Apply 360° strategies to mitigate tax liability
- Achieve the control and flexibility required to leverage current wealth to grow the business and assets
- Free up time, by consolidating the many areas of the business and personal
financial situation into one strategy for optimising tax and growth
TLPI offer a free, no-obligation consultation to get the full picture of a client’s situation and provide them with their options. Each client is assigned to their own dedicated consultant who takes the time to assess the individual situation and advise on whether the structures that TLPI offer would be appropriate, and if so, how to best tailor them to the specific circumstances.
Vip and his son attended the consultations together, gaining a full understanding of how the Family Investment Company could work for their personal and business aims and goals. After receiving all the information and facts from their TLPI consultant, they decided that the Family Investment Company structure was the right product for their situation and worth going ahead with. Throughout the rest of the process, Vip was pleased to find that TLPI “kept in touch and sent regular communication on everything that was going – it was fantastic.”
The Family Investment Company is the ideal, tax-efficient wrapper for purchasing and holding property, whether that be commercial or residential. When connected to an existing trading company, as with Vip’s situation, it becomes simple to transfer surplus company cash into the FIC.
The FIC involves a trust element to protect its contents and separate them from the family estate, therefore eliminating any potential Inheritance Tax on the assets held within it. However, unlike a traditional trust, the Family Investment Company offers more flexibility and control over the funds and what to do with them.
Vip can move surplus company cash from his existing limited company over to a Family Investment Company, which not only will bring down his trading company’s year-end tax bill but will provide funding for his future investments. Alternatively, he can make a director’s loan into the FIC with his personal funds.
Once these investments have been made, they will be held and protected within a ring-fenced, tax efficient structure. They will also be protected from a hefty Inheritance Tax bill for his son, should the worst happen.
TLPI are registered with HMRC to set up Family Investment Companies on behalf of our clients.
Vip now has his Family Investment Company set up and is ready to start making investments. It is connected to his pre-existing limited company, which can move funds into the FIC to use for investment purposes.
Vip is still in the early days of his Family Investment Company journey. Whilst he has yet to make any investments, he is actively looking to do so and making sure to do the necessary due diligence. He notes that when he does come across something that takes his interest, he will use his Family Investment Company to make the purchase and hold the property.
TLPI provide ongoing investment information, strategy consultations, and tax updates. When Vip is ready to make investments through his Family Investment Company, his consultant is at the end of the phone to support him, whether that is with administrative, strategy or structure advice.
“I’m doing my due diligence as I search. I’ve not come across anything yet, but as and when I do, everything will be through my Family Investment Company.”