Edition 1st
Published January 2022
Length 250pp est.
Suitable for Accountants, Tax Advisers
Price 85
ISBN 9781912386529

Employee-Ownership Trusts


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Since legislation was introduced in 2014, there has been a consistent growth in the number of company sales to employee-ownership trusts (EOTs). 

Accountants need to understand the different aspects of establishing a suitable trust, including satisfying the tax requirements to obtain CGT exemption and putting in place suitable corporate governance arrangements to ensure that the vendors are paid in full and that the business continues to prosper as an EOT-owned company.

This new volume brings together the technical and practical aspects, offering a vital guide for professional advisers in this field. 

The author, David Pett, is a tax barrister at Temple Tax Chambers in London. Read more here.

  • History of companies controlled by trustees for employees
  • The point of employee-ownership trusts
Capital gains tax relief
  • The need for relief
  • Conditions
  • Pitfalls and practicalities
  • Losing the relief
  • Re-settlement by an existing employees' trust
  • Who are the trustees?
  • Terms of the settlement
Inheritance tax
  • Vendor considerations
Practicalities at the outset
  • Safeguarding the vendors' interests
  • Checks and balances safeguarding ownership and control
  • The terms of purchase
  • Funding the trust
  • Employee communication
Looking ahead
  • Planning for a future sale of the company
  • The very profitable company
  • Tax-free bonuses
  • Putting shares into the hands of the employees
  • Maintaining the employee-owned ethos
Potential drawbacks
  • What can possibly go wrong?