Employee Ownership Trust

The shareholders of a Company wishing to exit the business but wishing to ensure the continued independence of the company they may consider establishing an Employee Ownership Trust (“EOT”)

The benefit to the shareholder is that subject to satisfying the requisite criteria he can sell his shares to the EOT and claim complete exemption from Capital Gains Tax.

What do I need to do?

  • Ensure that the Company is carrying on a trade see here
  • Sell at least 50%+1 of the entire ordinary share capital of the Company to the EOT for no more than current market value within the tax year.
  • The trust must not have had a controlling interest prior to the tax year in which the disposal was made.
  • The trust must benefit all employees see here