Peter Rayney explains the ongoing accounting and tax treatments for typical investments made by family investment companies.
Family investment companies (FICs) are now increasingly used for succession and estate planning. As I now get lots of accounting and tax questions about the various types of investments made by FICs, I thought it would be useful to examine the more prevalent points for our readers.
Accounting background
FICs normally record their investments in the balance sheet as fixed asset investments. Such investments are generally purchased for long-term growth with the view to enjoying dividend or interest income on a regular basis (see below for treatment of regular share dealing profits).
Under UK generally accepted accounting principles (GAAP), FICs generally account for theirâ¯investmentsâ¯in various ways, depending on the nature of the
