Employee Ownership Trusts - Tax Aspects & Other Issues with Jeremy Mindell

Introduction

The Employee Ownership Trust (EOT) is increasingly becoming seen as a tax-efficient way for an owner to exit the company. With the reduction in the relief for BADR and the increase in the main Capital Gains Tax (CGT) rate to 24%, the sale to an EOT stands out as particularly attractive.

If it is carried out correctly, the exemption from any CGT is extremely attractive. Still, there are many conditions to be satisfied and pitfalls to be avoided.

Both the EOT advisory industry and the Treasury felt that there were too many potential abuses of the generous exemption from CGT. The Finance Act 2025 changes deal with these potential abuses and still leave an EOT as an attractive option.

Presented by expert speaker Jeremy Mindell, this workshop session will show you how to navigate the rapids without hitting the rocks.

What You Will Learn

This course will cover the following:

• What is an EOT? The Helicopter view
• Comparison with other exit routes for owners of Owner Managed Businesses (OMBs)
• Impact of the recent changes enacted in the Finance Act 2025
• What are the potential exit routes for the owner and why might an EOT be appropriate?
• The qualifying conditions
• Trading company or principal company of a trading group
• Application to all employees on the ‘same terms’
• Acquiring a controlling interest
• Shareholders who are directors/employees
• Trust property to be applied for the benefit of all eligible employees
• Appointing trustees of the EOT
• Financing the acquisition for the EOT
• What are the advantages of selling to an EOT for the original owner?
• Seeking clearance for transactions in securities from HMRC
• What are the advantages of an EOT for the employees?
• Incentivising the employees after the transfer - options and exits
• Potential areas of concern
• Potential issues after the transfer for the original owners
• Disqualifying events after the transfer and their tax consequences
• Learning from EOTs that have taken place