The recent article from STEP highlights HMRC's decision to close down its specialist unit that was investigating a potential link between tax non-compliance and Family Investment Companies (FICs). This announcement is certainly very welcome news as it provides greater certainty to those who have, or indeed are considering, using such asset protection and succession planning vehicles.
HMRC appears to recognise that the individuals using FICs are usually well advised and cognisant of their tax obligations and operate very much within the UK's tax code. Given the ongoing tax charge when creating a lifetime trust, this development will ensure that FICs remain a very attractive option; specifically for those families seeking to pass wealth down from the older generation to the younger generation, whilst retaining control over the access and investment of such wealth.
FICs will now be treated as ‘business as usual’ by HMRC, rather than be subject to the scrutiny of a dedicated unit.