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Issue:
4903
/
Categories:
Comment & Analysis
, employee benefit trusts
, employee ownership trust (EOT)
, TCGA 1992
, Business
, Capital Gains
Benefits all round
Key points
- Many vendors are selling their shares to an employee ownership trust (EOT) rather than enter into a standard trade sale to an outside third party.
- EOTs can provide succession planning for family businesses if the next generation work in the business.
- There are some key conditions which must be met to achieve a qualifying disposal to an EOT.
- A main benefit of an EOT is that the profits of the business can be distributed to the employees.
- The government is consulting on making changes to employee ownership trusts and employee benefit trusts.
Employee ownership trusts (EOTs) were introduced by the government in 2014 and as we approach the tenth anniversary of the EOT tax regime after a slow start EOTs have now become very popular as their tax advantages are now increasingly appreciated.
Many vendors are now selling their shares to an EOT rather than enter into a...
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