Employee Ownership Trusts
Neathouse Partners has a team of dedicated and experienced lawyers who can help businesses like yours implement Employee Ownership Trusts (EOTs) in style.
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What is an Employee Ownership Trust?
Employee Ownership Trusts (EOTs) are a special type of Trust that essentially works on the model of businesses selling shares to employees. The HMRC-backed scheme was launched in September 2014 under the Finance Act and encourages an enhanced level of corporate structure.
The scheme carries a number of benefits for employers and employees alike. Our experts can guide you through the entire process for an agreeable outcome. To learn more, get in touch today.
How an Employee Ownership Trust will benefit your business
Facilitating an employee-ownership model is something that the Government has actively encouraged businesses to do in recent years. Unsurprisingly, it can deliver several benefits for companies that adopt this structure. For starters, selling shares to employees is quicker (usually within 12 weeks) and more convenient than looking for third-party investors (often 12 months or longer).
Financial benefits include noticeable tax savings. Selling the controlling stake under this structure is exempt from Capital Gains Tax (CGT), which can potentially save a company millions. Income Tax and Inheritance Tax liabilities are also avoided.
Another key incentive is that employees have a stake in the company, which instantly changes their mindset. Their increased engagement and attachment to the business can lead to increased productivity, alongside reduced absenteeism and lower staff turnover rates. All of those results will ultimately support the future of your company.
Employee Ownership Trust (EOT) advantages
Employee Ownership Trusts share several benefits with other popular initiatives like the Enterprise Management Incentive (EMI) share scheme, especially for employees, and Neathouse Partners can help unlock the full potential of it for all parties. Workers can also benefit from untaxed bonuses of up to £3,600, having a voice in company matters, and knowing that any company sale would generate a big ROI.
For businesses like yours, additional incentives include but are not limited to;
- Reduced expenses during the transaction of selling shares,
- Give shareholders the opportunity not to sell their stakes,
- Know that there is no impact on your Business Asset Disposal Relief,
- Be guaranteed to sell at a fair market value,
- Avoid the distractions that often surround third-party sales.
Setting up and managing an Employee Ownership Trust
Here at Neathouse Partners, we pride ourselves on delivering a comprehensive service that helps you make the most of EOTs. We can help establish and manage the Employee Ownership Trust to deliver immediate and long-term rewards. We will;
- Confirm that the business meets the eligibility criteria,
- Check that this is the best solution for the company,
- Complete the application and set up the Trustee Company,
- Manage share purchase agreement to transfer shares to employees,
- Create the debt from Trustee Company to shareholders,
- Ensure that trading profits are used to complete EOT contributions.
Once established, the Employee Ownership Trust becomes a natural part of the company’s fabric to deliver ongoing benefits for employers and workers alike. Our experts can handle the process in a quick and affordable fashion while simultaneously complying with all guidelines.
To find out more, book an appointment with our friendly advisors today.