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AIF & Fund Management Services

Family Office & Private Wealth Structuring

Family Office

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Overview

Family office and private wealth structuring is the professional management of a wealthy family's financial affairs — investments, trusts, tax, succession and the governance of the family's wealth across generations. The investment layer runs through the SEBI-regulated vehicles: alternative investment funds under the SEBI (AIF) Regulations 2012 and portfolio management services under the SEBI (Portfolio Managers) Regulations 1993, alongside direct investing. The structure layer runs through trusts, holding companies and the family arrangements that separate ownership from management. The tax layer sits on the Income Tax Act 1961 — the exemptions, the regime choice and the capital gains planning.

The family office exists because wealthy families face problems that scale with wealth: multiple generations with different needs, assets across jurisdictions and asset classes, a business that concentrates the family's exposure, and the tax consequences of every decision. The office consolidates the decisions into one strategy — the investment policy, the trust structures, the succession plan and the annual review — so that the family's wealth is managed as a portfolio, not a collection of accidents.

The cost of an unstructured family fortune is paid in fragmentation: wealth scattered across accounts and advisors, trusts that do not match the family's intentions, tax paid on structures that planning would have avoided, and a succession that distributes the wealth without preserving it. Each is a quiet, compounding leak.

This service is for wealthy families, promoters and HNIs structuring their wealth. We design the family office operating model, structure the investments through AIFs and PMS under the SEBI frameworks, build the trust and holding structures for succession and protection, run the tax planning under the Income Tax Act, and manage the annual cycle — investment review, compliance and family governance.

How It Works

  1. 1

    Wealth & Family Mapping

    We map the family's assets, entities, generations and objectives into one view.

    You do this1 week
  2. 2

    Family Office Model Design

    We design the family office operating model — governance, reporting and the decision framework.

    Harun Raaj & Associates does this1-2 weeks
  3. 3

    Investment & Vehicle Structuring

    We structure the investments through AIFs, PMS and direct holdings under the SEBI frameworks.

    Harun Raaj & Associates does this2-4 weeks
  4. 4

    Trust & Succession Structure

    We build the trusts and holding structures for succession and asset protection.

    Harun Raaj & Associates does this2-4 weeks
  5. 5

    Annual Cycle & Review

    We run the annual investment review, compliance and family governance cycle.

    Harun Raaj & Associates does thisAnnual

Frequently Asked Questions

What tax rate applies to income earned inside a private discretionary trust?
A private discretionary trust is taxed at the Maximum Marginal Rate — 30% plus applicable surcharge and health and education cess — under Section 164(1) of ITA 1961 for AY 2026-27 income. Where the trust deed names each beneficiary and specifies their share, Section 161 allows the trustee to be assessed at each beneficiary's individual slab rate instead, which can be significantly lower. From TY 2026-27 onwards ITA 2025 governs and the equivalent position is carried forward under Chapter XV. Drafting the beneficiary allocation clause correctly is therefore the primary tax-engineering lever in private trust structuring.
How is a Category II AIF registered and what are the ongoing SEBI compliance obligations?
Category II AIFs — which include private equity funds, real estate funds, and debt funds that do not use leverage beyond permitted limits — are registered under Regulation 16 of the SEBI (Alternative Investment Funds) Regulations, 2012. Minimum corpus is Rs. 20 crore and minimum investment per investor is Rs. 1 crore (Rs. 25 lakh for employees and directors of the manager). Annual compliance includes filing a placement memorandum in Form A, quarterly investor reports, and compliance with SEBI Circular SEBI/HO/AFD/AFC1/P/CIR/2023/97 on valuation norms for unlisted securities.
What FEMA filings are required when an NRI family member contributes capital to a family trust or AIF?
NRI contributions to an irrevocable private trust holding Indian assets require prior RBI approval under FEMA 1999 read with the Master Direction on Acquisition and Transfer of Immovable Property in India (2018). For AIF subscriptions, NRI and OCI contributions are permitted on a repatriation basis under Schedule IV of the Foreign Exchange Management (Non-debt Instruments) Rules, 2019, provided the fund holds a valid SEBI registration. Each inward remittance must be reported — typically in Form FC-GPR for equity instruments or the relevant FEMA reporting return — within 30 days of receipt.
How are capital gains from a Portfolio Management Service taxed, and are PMS fees deductible?
A PMS arrangement does not create a separate legal entity — gains flow directly to the investor and are taxed in their hands. For AY 2026-27, short-term capital gains on listed equity held under 12 months are taxed at 20% under Section 111A of ITA 1961 (post Finance Act 2024 rate), and long-term gains exceeding Rs. 1.25 lakh are taxed at 12.5% under Section 112A. Under ITA 2025 for TY 2026-27 these provisions map to Sections 67 and 68 respectively. PMS management fees are not deductible against capital gains — there is no provision under Section 48 to allow such a deduction.
Which succession mechanism avoids capital gains tax when transferring listed securities within a family?
Transfers by way of gift, will, or irrevocable trust settlement are excluded from the definition of transfer under Section 47(iii) of ITA 1961, so no capital gains arise at the point of transfer. When the recipient — whether a trust, heir, or HUF — subsequently sells, the cost of acquisition is the original cost to the transferor under Section 49(1), and the holding period of the transferor is included for the purpose of determining short-term or long-term status. A family settlement among co-parceners effecting partition of an HUF does not attract capital gains under Section 171. Stamp duty on the trust deed is governed by the applicable State Stamp Act and varies from 0.1% to 5% of corpus value depending on the state.

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