Employee Ownership Trusts are highly beneficial to business owners and their employees.
Employee Ownership Trusts (EOTs) are a government incentive designed to promote employee ownership by allowing business owners the opportunity to sell their shares to an employee owned trust, which is free from capital gains tax.
It is a collective vehicle which acquires a controlling interest in a company and holds the interest for the long term benefit of the company’s employees.
EOTs were first properly introduced by the Government with incentives in 2014. There are well over 1000 EOT Companies in the UK which include: John Lewis Partnership, HLM Architects, Go Ape, Arup Welsh Power.
Benefits Of An Employee Ownership Trust?
EOT’s were designed to increase employee ownership of UK Business’s. Studies have shown that Employee-owned businesses perform better, and the employees show greater commitment when they have a stake in it. Which includes demonstrating greater resilience, innovation, and improved profitability.
Business owners can sell the business at market value to the EOT and the sale value does not attract capital gains tax for the seller. EOT helps the owner secure a friendly buyer as it is an internal transaction not involving any third parties. Employees can benefit from tax-free bonuses of up to £3,600 each year.
How Can Entrepreneurs Hub Help?
Free Consultation – reviewing your options
Feasibility Report – is it right for your company
Valuing your shares and cash flow modelling
Tax, Legal and Trustee introduction support
Implementation of the EOT
Employee communication plan and implementation
We’d love to hear from you
Now you’ve learned a bit more about our services, please get in touch to find out how we can help you achieve your goals.