If you’re planning your exit, an Employee Ownership Trust (EOT) is an excellent opportunity for the right business. From zero Capital Gains Tax to generous tax-free employee bonuses, it’s clear to see why EOTs are becoming so popular.
An EOT is a special kind of trust set up to hold shares in your company for the benefit of all employees. Providing you are selling more than 50% of your stake in the business, and meet other conditions (set out below), you and the business will enjoy the following benefits.
Not every business and owner is suitable for an Employee Ownership Trust, and several conditions must be met in order to qualify for the tax benefits of the transaction.
There is a four-year tax recovery period following an EOT transaction. That means the government can claw back any tax from the exiting shareholders up to four years after completion if EOT rules are broken.
Martin Dean FCCA of Gravitate Corporate Finance has a proven track record of facilitating these transactions. Martin and his team can help you every step of the way to an EOT sale.
There is no one-size-fits all playbook for EOTs, so we strongly recommend a proper conversation about you, your business, and its goals. That way we can ensure this route is right for you, and help make it a reality.
To help you get started, though, we invite you to download our free EOT guide, which includes the fundamentals of an EOT, qualifying rules, benefits and other considerations.
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