It started as a sensible, well-intentioned plan. The kind that looks reassuring on a spreadsheet and even better in a meeting room.

In 2010, in the aftermath of the financial crisis, UK property prices were depressed and interest rates were at historic lows. Martin and Laila Green, both in their early forties, were thinking ahead. They had savings, a small portfolio of rental properties, and two young children. Like many families at the time, they wanted to grow wealth responsibly and pass it on efficiently.

On the advice of their accountant, they set up a Family Investment Company (FIC).

The pitch was compelling: retain control, minimise tax, and create a long-term family legacy.

They invested £750,000 into the structure, transferring properties and capital into the company. On paper, it was elegant. On paper, it was smart.

Fifteen years later, the properties are now worth over £2.5 million. The company has grown. The accounts are immaculate. But the plan itself? It no longer feels simple.

They can’t sell without triggering tax.

They can’t gift without triggering tax.

And their children, the intended beneficiaries aren’t sure whether they’ve inherited an asset… or a responsibility.

It Sounded Simple, Until Time Got Involved

Family Investment Companies are often positioned as a sophisticated solution for UK families with surplus capital or property.

The advantages are familiar:

In the early years, a FIC can work exactly as intended.

But time changes everything.

Tax rules evolve. Governments shift policy. Families grow, disperse, and change priorities. What once felt robust begins to feel delicate. And complexity — the kind that doesn’t show up in year one — starts to surface.

A FIC is never just a tax structure.

It’s a long-term bet on:

Those are not purely financial variables.

When a Family Asset Becomes a Family Burden

By their mid-twenties, the Greens’ children each held shares in the company.

One child wanted to reinvest and expand the portfolio.

Another wanted to sell and release capital.

The youngest, now living overseas, wanted out altogether.

Family discussions slowly shifted.

Sunday lunches gave way to board-style conversations.

Spreadsheets replaced shared assumptions.

Control, it turned out, was not a neutral gift.

What began as a strategy to unite the family around a shared future started to highlight differences in ambition, geography, and risk appetite. The structure hadn’t failed, but it was no longer flexible enough to adapt to real life.

Taxes Don’t Pause for Family Decisions

Then comes the moment no one likes to plan for.

When a shareholder dies, a Family Investment Company does not simplify itself. Inheritance Tax (IHT) still applies. Shares must be valued. Reliefs may be limited. And crucially, the tax bill is often due in cash.

But the cash is frequently locked inside:

Extracting funds triggers further tax through dividends, capital gains, or liquidation. Either route has consequences.

At exactly the moment when families are grieving, the structure can force:

What was designed to preserve wealth can, ironically, accelerate its erosion.

When Simpler Structures Outperform Smarter Ones

None of this means Family Investment Companies are inherently wrong.

For some families particularly those with:

A FIC can still be effective.

But for many UK families, simpler options outperform complex ones over time:

Because the most resilient plans aren’t always the most intricate.

They’re the ones everyone understands and can live with.

A Question Worth Asking Early

Tax efficiency matters.

But so do relationships, flexibility, and peace of mind.

Before setting up a Family Investment Company, it’s worth asking:

Is this structure genuinely building a legacy
or is it quietly building complexity for the next generation?

Good planning should reduce friction, not create it.

How We Help

At Elixir, we help UK families step back from the structure itself and look at the bigger picture, tax, family dynamics, liquidity, and long-term intent.

Sometimes that means refining a FIC. Sometimes it means unwinding one carefully. And sometimes it means choosing a simpler path from the start.

If you’re considering a Family Investment Company or questioning one already in place: a clear, independent review can save years of stress later. Book a discovery call to explore the right approach for your family’s future.

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