Employee Ownership Trust

An Employee Ownership Trust (“EOT”) is a vehicle that buys your business, holding shares on behalf of the employees. Independent trustees are required to ensure that the business is operating in the best interests of the employees.

EOTs are relatively new and can provide good tax incentives for shareholders when exiting, however careful consideration needs to take place to ensure that this exit route is for the right reasons and in the best interests of the business and employees.

If you’d like to speak to us, please don’t hesitate to get in touch and book an initial business strategy assessment.

• Vendors can potentially benefit from a nil capital gains tax rate

• Future governance and ensuring the right individuals continue to be incentivised to drive the business forward can be difficult to get right

• The ultimate value of any retained equity may be different to other exit options

• EOTs may take longer for vendors to extract cash

• Founders can exit the business whilst still keeping the culture and values

We recommend that your first step should be seeking expert advice on EOTs and having a conversation with an advisor to discuss your reasons for preferring this exit option.

Our advisors can firstly ensure that this is the best option for you and the business, and assist in the preparation of the business, information flow and delivery of a successful transaction.

As part of the wider CN Group, we can also provide tax advice as part of our service, so you can reduce the tax you pay on any business transaction and get the most out of your business sale.