EOTs are a government initiative aimed at promoting employee ownership, by giving all employees a significant and meaningful stake in the business, including a say in how the business is run while providing a great opportunity for shareholders to sell their business for the best value in a more tax-efficient way, free from capital gains tax.

An EOT can be set up by a company’s existing owners, perhaps as part of their exit or succession planning strategy, or by founders starting a new business which they wish to be employee owned. It was created by the Finance Act 2014, to encourage more companies to become employee owned.

For a private company owner wishing to retire but looking for an alternative to a trade sale, an EOT is one option worth contemplating.
You may wish to consider an EOT if any of the following scenarios apply:

• You are looking how to retire from the ownership of your company in a way which creates a strong platform for future success in the interests of you, your business and its people
• You don’t feel a trade sale or management buyout is feasible or the best solution
• You want to start a new business with maximally committed and engaged people and a strong shared purpose
• You work in a business which needs to find a succession solution but has not been able to do so