Alternative and hybrid structures
Parents naturally want the best for their children, and for many this means passing down their wealth for the benefit of the next generation.
Doing so is not straightforward, however, particularly when family members and their assets are located in different jurisdictions.
This is where we can help: creating family investment companies (FICs), family limited partnerships (FLPs) and hybrid structures that make gifts more flexible and tax-efficient. We work on solutions to transfer assets to the next generation. allowing you to involve family members in the management of wealth while still protecting its value.
This was a concern for a London-based Indian client who had built a thriving construction business and was considering retirement. He hoped that his children would take over the running of his company, where most of the family’s wealth was tied up, but did not feel that his eldest son was ready to do so. He had two further children with his second wife, but they were still minors and as a complicating factor there were tensions between his wife and adult son. We suggested creating a family investment company, which would pass on stewardship of some interests down to the younger generation, but without making them responsible for the family’s primary source of income. Our client was relieved to find a solution that would be palatable to his wife and elder son, while also offering tax savings.
These type of family holding structures can also make family assets more robust. This was important to one landowning family who consulted our London office. Between them, they controlled a large area of land in the UK but the ownership was very fragmented and there was a risk that if one relative were to sell their portion of land – perhaps even to lose it through a bad business investment, or a divorce – that this would negatively affect the rest of the family. We brought the whole estate together in a family limited partnership in which the relatives became partners, taking decisions together.
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08 August 2017
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