Abacus has the experience and expertise to create and manage bespoke trusts, companies and funds to help our clients achieve their ambitions.
Below, the Abacus funds team outlines some of the advantages of an exempt fund structure for a family business:
- Exempt funds can be used to unitise, manage and transfer ownership stakes in a family business to the next generation.
- A fund can help in creating a fair distribution of assets among family members, particularly when not all members are involved in the business' operations.
- The fund might also be used to invest profits and reserves in a diversified portfolio of assets outside the core family business, spreading risk and potentially increasing overall family wealth.
- Exempt funds can be structured to facilitate philanthropic activities.
- An Isle of Man exempt fund is regarded as a private arrangement, is not subject to separate regulation and can be established relatively quickly and economically by licensed administrators.
- An Isle of Man exempt fund is often referred to as a “Friends & Family” vehicle and is a popular option provided there are no more than 49 investors at any time and interest in the fund is not offered to the public.
- In some cases, exempt funds are used to manage employee benefit plans or pension funds within a family business.
- Family members might use an exempt fund as part of their retirement planning strategy, allowing them to save for retirement in a tax-efficient manner.
- A family business may use an exempt fund to manage liquidity, ensuring there are sufficient funds available for operational needs or expansion.
- Administration by a regulated, independent fund administrator provides an additional layer of scrutiny and security.
No action should be taken on the basis of this note, nor should it be construed as amounting to tax, legal or VAT advice. Suitable, specific and professional advice should always be obtained in respect of any particular issue.
