Unlock the Power of Employee Ownership
for Your Business
Join the growing number of companies benefiting from Employee Ownership Trusts (EOTs) with expert guidance from a leading EOT solicitor.
✔ Seamless Transition: We handle everything to ensure a smooth and successful move to employee ownership.
✔ Proven Expertise: Over 60 companies supported, creating 3,500+ employee-owners.
✔ Unmatched Value: Helping businesses transition with a combined worth of £400 million+.
Take the next step with confidence—contact us today for expert implementation and ongoing support to secure your company’s future success!
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About Christian Wilson
Christian Wilson is an Employee Ownership Specialist with 25 years’ experience in Business Law. He created employee-ownership-trusts.co.uk to help companies understand more about how EOT works, the many benefits of EOT – including tax incentives – and how to determine whether EOT is a good option for the future of a company.
Within the legal and business communities, Christian is a trusted figure, called to speak nationally about EOT. He has has been instrumental in helping numerous companies prepare and realise their EOT Strategy, see our case studies.
A partner at Spencer West LLP, an international law firm. Ranked a Leading Partner in Legal 500 and Notable Practitioner in the Chambers guide.
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EOT Guide 2022/23
A thorough 26-page introduction to Employee Ownership, including:
• Why form an EOT?
• EOT vs other options
• Understanding EOTs: The Fundamentals
• Practical issues
• Tax incentives
• Will you need support?
Expert EOT advice
Succession of any kind, is a watershed moment for the owners of a business, the company and its employees. When you are about to take that step, it is worth finding and retaining expert assistance which will ensure that your vision becomes the reality.
The support for Employee Ownership Trusts is led by Christian Wilson, a solicitor with over 20 years of experience in advising and supporting businesses through all types of corporate transaction and is now focussed on supporting the rapidly growing world of EOTs.
Recent Employee-Ownership articles
The EOT Checklist: 10 Questions to Ask Before You Start the Transition
Thinking of transitioning your business to employee ownership? An Employee Ownership Trust (EOT) may offer the ideal solution – but before you go too far
Leadership Share Incentivisation in an EOT business
Introduction
As an employee-owned company operating under an Employee Ownership Trust (EOT) structure, implementing a share option scheme for leadership requires careful consideration. This document outlines the potential benefits and challenges, with a particular focus on compliance with EOT requirements, the impact on leadership incentives, and the potential consequences for the Trust and its beneficiaries.
The taxation of EOT bonuses – even AI gets it wrong! Here’s the correct answer…
EOT Bonuses and an AI conversation! There is much confusion about how EOT bonuses are paid to employees and some advisers stubbornly refuse to accept
We can provide you with a comprehensive and highly experienced level of support to enable you to complete your EOT journey successfully and without any drama.
Employee Ownership
Frequently Asked Questions
Employee Ownership Trust Disadvantage & Advantages
| Issue: | Employee Ownership | Management Buy Out | Trade Sale |
| Value | Sale at full market value determined by valuation, limited only by the affordability of the company to support the repayment. | Value may be restricted by the management team’s willingness to borrow and risk personal liability | Price determined by what a buyer is willing to pay. Value may be subject to price chipping and earnouts. |
| Timing | Can be implemented at a time and over a timescale suited to the owners – no other parties are involved. | Management team need to be able to proceed, along with any funders. | Finding a buyer can take months, possibly years. Out of the blue offers leave owners scrambling to meet buyer deadlines. |
| Legacy | Values and culture can be deeply ingrained into an EO succession. A values document or ‘letter of wishes’ can help steer the company to make principled decisions. | Management team may be able to maintain existing culture, but any external investors may wish to focus on delivering short term results. | Many company mergers fail because of cultural differences between companies. ‘Synergies’ implemented post completion often lead to redundancies. |
| Complexity | While an EO transaction does require time and consideration of important issues, there is only limited due diligence and no combative legal and financial process. | While not as complex as a trade sale, the Management team will need to undertake due diligence and settle terms for repayment of sellers through loan notes along with investor requirements. | Robust and thorough due diligence process alongside negotiation of sale terms can lead to complexity and the need for an extensive number of advisers. |
| Flexibility | The founders may continue with the business in the same role or may step away, reducing their commitment or choosing to be a trustee only. | Founders may have a continuing role, but this will depend on what the Management team are prepared to agree. | The founders may have short term roles within the business, but often the sale is the end of the relationship with the company. |
| Costs | Fixed costs and transparency should be the norm in an EOT. | Complexity of the project will determine costs. The need for parties to have separate advisors will mean higher costs. | Trade sales are difficult price because it depends on the buyers adviser’s approach, but likely the most costly option. |
What are the tax benefits of an EOT?
There are two very significant tax advantages in an EOT:
0% Income Tax
Once owned by a qualifying EOT, the company may adopt a policy to pay bonuses to the employees out of profits. £3,600 per person per year can be paid free of Income Tax. The profit share can be distributed as an equal sum for all, or can be allocated by reference to an employee’s remuneration or length of service or pro-rated for hours worked or a mixture of the three.
0% Capital Gains Tax
The sale of a majority of shares to a qualifying EOT is subject to zero Capital Gains Tax. This means that provided the rules are met, no Capital Gains Tax is payable on the proceeds of the sale to the EOT. There is no upper limit on the sale price. Of course, the critical aspect here is that the sale must meet all of the qualifying criteria, outlined in our our guide:
When should an EOT be considered?
We encourage clients to explore how this route differs from other choices (typically trade sale or private equity investor sale) to help make an informed choice about the route that is best fit for their objectives and circumstances.
Making use of an EOT does not necessarily preclude a third-party sale at a more distant future date but can provide a framework for continued independence for those companies who wish that.
What is an EOT and how does it work?
To implement it and to take advantage of the tax incentives, more than 50% percent of the company’s shares need to be acquired by a qualifying EOT.
Furthermore, there is almost no sector or industry that could not consider an Employee Ownership Trust as a future for their business.
What are the Tax advantages?
Benefits of employee ownership
Talk to our team
Book a call with Christian or a member of his team to find out how you can start your journey to employee ownership.