Key takeaways

UK non-dom reform, corporate transparency measures and a more interventionist approach to economic crime is changing how private capital is held, governed and defended. Many families are not changing strategy because their assets have shifted, but because the legal environment around ownership has transformed.

Which private investment structures still work for wealth preservation under UK transparency reform?

The UK private limited company remains one of the primary investment vehicles, but it now operates in a tighter compliance setting. The Economic Crime and Corporate Transparency Act 2023 has accelerated Companies House reforms and expanded the Registrar’s powers, with a practical consequence that ownership chains must be capable of explanation. Families who previously accepted light-touch administration are finding that the burden has moved towards demonstrable governance.

The change is not simply regulatory. It is also evidential. When a structure is challenged, whether by a counterparty, an estranged family member or a tax authority, the question quickly becomes what the board actually did and what it understood. A holding company used to consolidate investments, lend intra-group and approve distributions can still be robust, but only where decision-making is recorded with discipline and directors understand the boundaries of their authority under the Companies Act 2006.

In cross-border families, the UK company is often paired with an offshore trust, private trust company or foundation. That layering can support succession planning and asset protection, but it also increases the number of touchpoints where substance can be tested. If the UK company is expected to be UK resident, its strategic decisions should not be made elsewhere. If it is expected not to be UK resident, UK-based control should not be disguised as administration.

How have UK tax residence cases affected private investment structures for wealth preservation?

The recent changes around the taxation of UK non-domiciled individuals have been one of the primary drivers of wealth preservation reviews, as the new UK framework moves long-term residents towards full taxation on worldwide income. Under the new Foreign Income and Gains (FIG) regime, effective from 6 April 2025, offshore income will remain outside the UK tax net for those still within their first 4 years as a UK tax resident, following at least a 10-year period as a non-UK tax resident. We explore in detail the non-dom changes, as well as non-dom considerations for US nationals moving to the UK.

When it comes to offshore trusts, which are a popular asset-protection vehicle, recent trust litigation in the UK illustrates how quickly formal appointment of offshore trustees can be outweighed by where management is carried out. In Haworth and others v HMRC [2025] EWCA Civ 822, the Court of Appeal focused on “place of effective management”, finding it in the UK where general management occurred rather than in the offshore jurisdiction where trustees were appointed.

That approach matters beyond trusts. Families using offshore trustees, protectors, investment committees and London-based advisers should assume that the operational centre of gravity will be scrutinised. Where investment decisions are effectively made in London, a paper trail showing offshore formalities is unlikely to be decisive on its own. This is one reason we are seeing greater emphasis on properly constituted committees, careful consideration of where meetings are held and where instructions originate.

Are family investment companies still a credible wealth preservation structure after April 2025 changes?

Family investment companies remain widely used for UK-resident families because they provide a familiar governance framework and a corporate tax regime that can suit long-term investment. The typical model, with founders funding the company through shareholder loans and issuing growth shares to children or trusts, can move future value outside the founders’ estates while retaining voting control and access to loan repayment.

The technical risks are well known, but they are being revisited in a more cautious market. The higher corporation tax rate of 25 percent for larger profits makes the extraction strategy more important, particularly where investments generate income rather than capital growth. Dividend policy, employment-related securities, and valuation of minority growth shares require structured advice and contemporaneous records. HMRC scrutiny tends to focus less on the concept and more on execution, especially where there is an impression that the structure is being used to move value without a credible commercial narrative.

There is also a litigation angle. A family investment company is often only as stable as the documentation that governs it. Articles, shareholders’ agreements and decision-making protocols need to anticipate incapacity, remarriage, competing branches of a family and differing liquidity needs. If the paperwork is thin, the dispute will be argued on recollection and inference.

What do shareholder disputes tell us about governance gaps in private investment structures?

Family wealth structures are increasingly being tested in court through shareholder and trust disputes, often triggered by death, divorce or a breakdown in relations between founders and the next generation. The courts have shown a willingness to enforce informal arrangements where the evidence supports them, but that is rarely a comfortable position for those managing significant assets.

Lane v Lane [2024] EWHC 2616 (Ch) was a useful example of the court engaging with an oral agreement about how shares in a family company were to be treated on death, despite the absence of written evidence and the presence of conflicting provisions in the articles. For wealth preservation, the lesson is straightforward. Where a structure is intended to deliver certainty, it should not depend on competing memories of what was agreed at the kitchen table.

How should international families handle dispute risk in wealth preservation structures?

For internationally mobile families, dispute risk is often the factor that determines whether a multi-generational structure holds. Confidentiality, enforceability and the location of assets all matter. It is increasingly common to include arbitration clauses for cross-border trusts and family governance documents, particularly where proceedings in the English courts would create unwanted disclosure or where enforcement may be required outside the UK.

Arbitration is not a substitute for sound drafting. It does, however, allow families to manage dispute risk in a way that aligns with privacy and cross-border enforcement needs. Where there is a mixed asset base, including UK property, operating businesses and overseas investments, that procedural choice can be materially significant to commercial viability of the investment vehicle.

Please contact the Corporate team at Barnes Law for advice on private investment structures for wealth preservation.

Authored by Barnes Law Managing Partner, Yulia Barnes.