EOTs – The Basics
An EOT:
Is a unique and innovative business structure that enables the transfer of ownership to employees, via a Trust arrangement.
Fosters a culture of shared responsibility, collaboration and long-term success.
Empowers your workforce, preserves your company’s values and ensures a secure and prosperous future for all.
Is a tax incentivised mechanism where a Trust is created for the purpose of owning shares in a trading business.
Ensures the beneficiaries of the Trust are the employees of the company, subject to certain qualifying obligations, such as a minimum period of employment.
Why should your business become an EOT?
Now you understand a little more about EOTs, what are the main benefits of your organisation becoming one? More and more UK businesses are becoming employee owned through the EOT structure, and this is because:
Engagement
You create an engaged and motivated workforce with increased productivity.
Legacy
You pass-on and maintain the legacy and ethos of your business.
Tax Advantages
As an owner you can benefit from capital gains tax exemptions, while employees can earn tax-free annual profit bonuses. And the business could also reduce its corporation tax liability.
Low-risk
An EOT is a low-risk business transition compared to an external sale and takeover.
Collaboration
Decision-making is collaborative and inclusive.
Stability
An EOT structure helps with employee stability and succession planning.
Best Employees
An EOT structure is a powerful tool to retain and attract the best employees in the marketplace.
