Employee Ownership Trusts (EOT)
Employee Ownership Trusts (EOT), what do business owners need to know?
Our team of London tax advisers regularly help and advise clients on Employee Ownership Trusts (EOT).
There are several rules surrounding the use of an Employee Ownership Trusts which were introduced by the UK Government to encourage more employee-owned businesses.
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A few facts about Employee Ownership Trusts…
What are the tax benefits of Employee Ownership Trusts?
The sale of shares held in a trading company to a qualifying EOT is tax exempt.
The sale must be at market value and the intention must be that the EOT is a long-term shareholder.
How many shares must the EOT hold?
The EOT needs to have more than 50% of the shares.
Employees can obtain an equity interest in the remaining shares.
Is it true, Employee Ownership Trusts must benefit all employees?
Yes, the trust must benefit all employees.
An EOT often works best when a shareholders exits the business but is permitted a limited ongoing participation.
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