Family Office: Protect and Transfer Business Wealth Across Generations

A family office is a private advisory structure that coordinates the management, protection, and inter-generational transfer of the wealth held by a business-owning family, integrating tax planning, legal structuring, investment management, succession planning, and governance advisory into a single framework. In Spain, family wealth management intersects multiple tax regimes: Corporate Income Tax (LIS) and Wealth Tax (IP/ITSGF) on the holding structure, Personal Income Tax (LIRPF) on distributions, and Inheritance and Gift Tax (ISD) on transfers — where Article 20.2.c LISD provides a reduction of up to 95% on the taxable base for transfers of qualifying family business interests, subject to maintaining the conditions for five years post-transfer. Family holding companies (sociedades holding familiares) are the most common structural vehicle, providing participation exemption on dividends under Article 21 LIS, asset protection, and a cleaner architecture for succession planning.

Business-owning families face singular challenges that private banking alone is not equipped to resolve: the separation of personal and business wealth, managing inter-generational interests and conflicts, tax optimisation of holding structures, and succession planning in its legal, fiscal, and emotional dimensions.

Why Business Families Need a Professional Structure to Protect and Transmit Their Wealth

Business-owning families accumulate wealth through decades of entrepreneurial effort, yet rarely have the professional structures needed to protect and transmit it. Wealth concentrated in operating companies carries concentration risk and generates annual wealth tax exposure. Holding structures that were never properly designed produce unnecessary tax leakage on dividend flows. Succession has not been planned, meaning that a founder’s death or incapacity triggers family conflict, inheritance tax bills that force asset sales, and uncertainty about business continuity — all simultaneously. No single adviser has ever looked at the complete picture. Our family office service is built precisely to fill that gap — a single point of coordination across tax, legal, finance, real estate, and private banking, with continuity of knowledge about the family’s full situation.

Our Family Wealth Diagnostic and Family Office Structuring Process

The engagement begins with a comprehensive wealth diagnostic: mapping the full family balance sheet, identifying structural inefficiencies, and quantifying the tax cost of the current arrangement against optimised alternatives. This diagnostic frequently reveals that the family business exemption for Inheritance and Gift Tax is not being fully maintained — either because the qualifying conditions were never formally verified, or because they have been inadvertently eroded as the founder’s active involvement changed. We then design and implement the recommended structure — holding companies, family investment vehicles, succession plans — and develop the family protocol that articulates governance rules across generations. The protocol covers admission of family members to the business, remuneration of active and passive shareholders, dividend policy, and exit mechanisms for those who do not wish to continue. The succession planning and tax planning teams work in close coordination to ensure legal structure and tax optimisation are designed as a coherent whole.

Real Results in Family Office: Tax Efficiency and Generational Continuity

• Comprehensive wealth diagnostic with full family balance sheet mapping and tax cost quantification of current vs optimised structure.
• Holding company design and implementation: participation exemption on dividends, asset protection, and family business exemption maintenance for ISD purposes.
• Family protocol drafted and formalised: admission rules, remuneration, dividend policy, and exit mechanisms agreed in writing before conflict arises.
• Succession plan integrating legal structure, tax efficiency, and family consensus — the generational transfer becomes a managed transition, not an existential risk.
• Next-generation onboarding programme: financial education, governance training, and structured involvement pathways that prepare heirs to take on responsibilities.

Family wealth management in Spain sits at the intersection of Corporate Income Tax (LIS), Personal Income Tax (LIRPF), Wealth Tax (IP/ITSGF), and Inheritance and Gift Tax (ISD). The family business exemption under Article 20.2.c ISD can reduce ISD by up to 95% on qualifying family business transfers — but requires active maintenance of qualifying conditions for five years post-transfer. Anti-avoidance rules in the LGT and LIS restrict the use of purely interposing holding structures without genuine economic substance. For families with international connections, EU and OECD rules on cross-border estate planning and exchange of information create additional complexity requiring specialised advisory. Our wealth tax specialists ensure that the IP and ITSGF dimensions of the family structure are managed alongside the ISD and corporate tax dimensions.