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Bloomsbury Professional Tax Insight: Family Investment Companies

ISBN13: 9781526512574
Published: January 2020
Publisher: Bloomsbury Professional
Country of Publication: UK
Format: Paperback, A4
Price: £40.00

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This is the first of a new series giving practitioners some guidance on specialist areas or complex areas of taxation where there is a need for some further understanding due recent changes in legislation or court decisions.

Family investment companies ("FIC") started to be used as an estate planning vehicle following the changes to the tax treatment of trusts that took place in 2006. Since then the structure has become increasingly popular, especially as corporation tax rates have been reducing.

As a result they are now widely used, but the term family investment company is applied to many different types of structures, used for a wide variety of purposes. This title explores what makes a company a FIC, to consider how a company works and the potential ways to make them more bespoke, the different types of shares available, their features and when they may be appropriate.

It also covers the key tax issues for funding a FIC, winding one up, privacy, reporting and asset protection features. It includes lots of examples based on real cases, and where relevant complex areas are illustrated by flowcharts and/or diagrams.

1. Introduction
2. Articles of Association:
2.1 Long or short form 2.2 Bespoke clauses: 2.2.1 Directors - meetings, appointments 2.2.2 Share transfers 2.2.3 Dividend payments
3. Share capital:
3.1 What is a share - voting, income and capital rights 3.2 Types of shares 3.2.1 Ordinary 3.2.2 Redeemable 3.2.3 Preference 3.2.4 Growth 3.2.5 Loan stock 3.3 Valuation issues
4. Shareholders Agreement:
4.1 Legal status 4.2 Purpose of FIC 4.3 Interaction with Board 4.4 Standard clauses
5. Taxation:
5.1 Taxation of the FIC 5.2 Taxation of shareholders
6. Funding:
6.1 Cash subscriptions 6.2 Sale of assets 6.3 Share exchanges 6.4 Gifts 6.5 Loans 6.6 Dividends from a trading company
7. Governance:
7.1 Directors' meetings 7.2 Use of committees 7.3 Shareholder meetings
8. Protection:
8.1 Types of risks 8.2 Impact of divorce on shareholder
9. Privacy & reporting:
9.1 Limited or unlimited 9.2 Reporting at Companies House
10. Winding up:
10.1 Process 10.2 Tax considerations
11. Example structures:
11.1 Simple structure 4 shareholders, ordinary shares, 25% each 11.2 Including a trust in the structure 11.3 More complex structure with redeemable preference shares 11.4 Structure with voting and non-voting shares 11.5 Structure using growth shares 11.6 A FIC with shares in a trading company