Tax-efficient succession through employee ownership

Unlock the Power of Employee Ownership

An EOT is an ownership structure that can be used as part of a business owner’s exit strategy or as the foundation for a new employee-owned company. They can also be used in conjunction with share options however, important interaction rules and strategic considerations that will need to be evaluated.

Key Benefits of EOTs

• No requirement to pay dividends, allowing reinvestment into the business.
• Increased employee motivation and retention.
• Tax-free cash bonuses of up to £3,600 per employee, per year.
• Full Capital Gains Tax (CGT) exemption for shareholders selling to an EOT.
• Potentially exempt transfer for Inheritance Tax (IHT) purposes.
  

EOTs offer exceptional benefits, but the conditions are strict and small oversights can have significant consequences. Careful tax, legal, and financial due diligence is needed to complete a clean, compliant transition to employee ownership.

At Sedulo Tax Advisory, we remove the complex burden, providing advice on the eligibility, reporting requirements and future administrative obligations. Whether you’re a business owner or adviser, our team of experts can provide an early-stage assessment and walk you through the real-world risks (and rewards) of the EOT route.