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An EOT is a trust that enables a company to become owned by its employees and can be set up by a company’s existing owners, perhaps as part of their exit or succession planning strategy, or by founders starting a new business which they wish to be employee-owned.

There are many benefits of Employee Ownership Trusts, these include:

• No need to pay dividends, this means cash can be reinvested in the business and staff.
• Enhanced employee motivation and retention.
• Companies owned by EOTs are also able to pay tax-free cash bonuses to their employees of up to £3,600 per employee, per year.
• Shareholders get a full Capital Gains Tax exemption.

We have significant experience designing and implementing EOTs, working alongside vendor shareholders to help them transition their business to employee ownership. This includes creating employee share schemes to retain and incentivise key employees. This area of tax advice is relatively new, as EOTs were only introduced in 2014.

We have delivered various seminars and webinars on this topic, including speeches at the London Tax Network annual conference, CIOT branch events, MBL seminars, CPD Store, and more. We have also published numerous technical articles in tax journals such as Taxation Magazine, Tax Journal, and Tax Adviser.

If you would like more information on Employee Ownership Trusts and what is involved, get in touch with our experts Pete Miller, Nick Wright, Sam Wightman and Adam Lediard.

You can also download our brochure.