Once set up by changing the model articles of association and writing strong shareholders agreement the running of the Family Investment company is the same as the running of any other limited company with the same tax rules.

Most Family Investment companies are investment companies as opposed to trading companies and so the capital shares are subject to inheritance tax which applies also to any unpaid director’s loans.

If you have 20 properties in your Family Investment company, it’s managed like any other portfolio in a limited company and the returns are done in the exact same way.

If your Family Investment Company owns shares in companies which don’t pay any dividends, tax is only paid when you sell the assets. The assets grow the same way as in any other limited company and therefore there is almost nothing to do in terms of tax returns and declarations of corporate tax because there is no return inside the company until you sell one of your shares.

The answer on how hard is to run a Family Investment company always depends on what assets the directors decide to hold in the company and if that company owns ant sub-companies. A Family Investment Company is exactly the same to run as any other limited company with exactly the same tax rules except for IHT liability on the capital shares as it is an investment company. However, this problem is solved by giving away the shares directly to your family or into an Employee Benefit Trust depending on the capital gains tax issues around those capital shares.