Employee ownership trusts (also referred to as “EOT’s) are becoming a popular way to encourage both employee ownership and a tax efficient exit for company shareholders. The existing business owners can sell their shares to a trust that is established for the benefit of the company’s employees.
The existing shareholders can benefit from a tax free sale but can remain as directors within the company and it would be normal for representatives of the employees to be appointed to the Board of Trustees.
Following the sale of the shares to the trust the employees of the company can receive a tax free annual bonus of up to £3,600
Freestone Jacobs have substantial experience in advising companies on the establishment of EOT’s and have been appointed at trustees of a number of EOT’s.