Family Office in United Kingdom

Tax regime

The UK taxes resident companies on worldwide profits at the main corporation tax rate (25% from April 2023 for profits above £250,000, with marginal relief below that threshold). A family-office vehicle structured as a UK limited company therefore pays corporation tax on investment income and realised gains; dividends received from portfolio companies benefit from an exemption where the substantial shareholding exemption (SSE) or dividend exemption conditions are met. Capital gains on most assets within a corporate wrapper are subject to the same 25% rate, though indexation allowance was frozen in 2017.

For individual family members who are UK tax-resident, the April 2025 reforms ended the historic remittance-basis regime for non-domiciled individuals. From 6 April 2025, a new four-year 'foreign income and gains' (FIG) relief applies: newly UK-resident individuals who have not been UK-resident in the preceding ten years may claim 100% relief on non-UK income and gains for their first four tax years of residence. After that window closes, worldwide income and gains become fully taxable. Inheritance tax exposure on non-UK assets now also shifts to a residence-based test (broadly, 10 years of UK residence triggers worldwide IHT exposure), fundamentally changing the calculus for ultra-high-net-worth families previously domiciled offshore. Income tax rates for individuals reach 45% on income above £125,140, and capital gains tax rates on carried interest and investment gains were aligned upward in the October 2024 Budget.

Key regulations

• Financial Services and Markets Act 2000 (FSMA 2000)

  The primary legislation governing FCA authorisation; determines whether a family office must be regulated and on what basis it may claim exemptions from full authorisation.

  Effective June 2000

• UK Alternative Investment Fund Managers Regulations 2013 (UK AIFMD)

  Retained-EU-law framework (as amended post-Brexit) governing AIFMs; SFOs relying on Article 3 exemption must confirm scope of assets under management remains below thresholds.

  Effective July 2013

• Finance (No. 2) Act 2023, Corporation Tax Rate

  Legislated the 25% main corporation tax rate effective April 2023, directly affecting UK-incorporated family office investment companies.

  Effective July 2023

• Finance Act 2025, Non-Dom / FIG Regime

  Abolished the remittance basis from 6 April 2025; introduced the four-year foreign income and gains relief for newly UK-resident individuals and reformed IHT on a residence basis.

• FCA Senior Managers and Certification Regime (SM&CR)

  Imposes personal accountability on senior managers in FCA-authorised firms, including regulated MFOs; requires annual fitness-and-propriety assessments.

  Effective December 2019

Substance & residency

The UK does not operate a dedicated 'family office licence' regime; a single-family office (SFO) that manages assets exclusively for one family and their close associates can potentially rely on an exemption from FCA authorisation under Article 3 of the UK version of AIFMD (the retained-law version post-Brexit) or, for non-fund structures, argue it falls outside the regulatory perimeter entirely. However, any SFO providing discretionary portfolio management, giving investment advice for remuneration, or managing an AIF for third parties must be FCA-authorised. Multi-family offices (MFOs) providing services to multiple families are almost invariably required to be FCA-authorised and regulated under the FCA's COBS (Conduct of Business Sourcebook) and SYSC (Senior Management Arrangements) frameworks.

Economic-substance requirements for UK companies are not as prescriptive as those in offshore centres, but HMRC's transfer-pricing and 'central management and control' doctrines mean that a family-office company must have genuine UK decision-making, board meetings held in the UK, directors physically present, and key investment decisions demonstrably taken on UK soil, to be treated as UK-resident. For structures that span multiple jurisdictions, the OECD BEPS-derived UK domestic legislation (particularly the Diverted Profits Tax and CFC rules) can impose additional tax charges if substance is perceived as insufficient relative to the profits booked in the UK entity.