HMRC has created a secretive unit to investigate the use of family investment companies by the very wealthy to avoid inheritance tax, putting family offices with an estimated $1tn-plus in assets in its sights.
HMRC set up the team last April to target the issue of FICs. The creation of the new unit, which was not previously disclosed, comes amid growing concern about inequality and the perception that the wealthy avoid taxes by using sophisticated legal instruments.
HMRC only revealed the existence of the new investigations unit, which sits inside its Wealthy and Mid-sized Compliance Directorate, only after a freedom of information request was filed by Pinsent Masons’ public relations company.
In a statement to the FT, HMRC said:
"The Family Investment Company team was established . . . in April 2019 to look at FICs and do a quantitative and qualitative review into any tax risks associated with them with a focus on inheritance tax implications. The team’s work is exploratory at this stage and as such, we would not like to share any more details.”Not so "secret" now!
Tax does have to be taxing.
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