The Autumn 2024 budget delivered an unwelcome, though not entirely unexpected, increase in Capital Gains Tax (“CGT”). This policy change has had immediate and expensive ramifications for Britain’s small and medium-sized enterprise (“SME”) owners, particularly those planning to sell their businesses. If that’s you, then it’s crucial to understand the implications and review your exit strategy accordingly.…
As companies seek ways to adapt to an evolving social and economic landscape, traditional business models of ownership and operation are being re-evaluated. In light of ongoing uncertainty with the new tax regimes, business owners face increasing pressure to future-proof their companies. The Employee Ownership Trust (EOT) has emerged as an attractive option for those…
Many business owners are now turning to Employee Ownership Trusts (EOTs) as a more attractive exit strategy. Since their introduction in 2014, EOTs have offered appealing tax benefits, including a 0% capital gains tax for owners transferring a controlling stake. This advantage is even more pronounced following yesterday’s budget, which raised Capital Gains Tax (CGT) from 10%…
8 minutes read In 2022, the UK witnessed a surge in the creation of Employee Ownership Trusts (EOTs), with a record-breaking 332 companies joining the fold. This brought the total number of employee-owned businesses in the country to 1,418 (source: Employee Ownership Association). This trend can be attributed to various factors, including succession planning needs, the…
7 minutes read Achieving competitive advantage in business is synonymous with outperforming competitors. This advantageous position is founded on four key pillars: efficiency, quality, innovation, and customer responsiveness. By excelling in these areas, a company differentiates its offerings, delivers enhanced value to customers, and potentially operates at a lower cost base, thereby increasing market share and…
9 minutes read A sale of your business to all the employees via an Employee Ownership Trust (EOT) is a relatively simple, advisor and vendor-driven exit strategy and therefore more immediate than a trade sale. What’s more, to encourage such sales, they are currently subject to 0% Capital Gains Tax, provided they meet the qualifying rules.…
4.5 minutes read Employee Ownership Trusts (EOTs) have become quite popular among business owners to sell their businesses. In the UK alone, there are now over 1,300 EOTs, and they received more than 400 applications last year. While the 0% tax break on Capital Gains is a significant advantage, there are other reasons why Employee…
4 minutes read EOT – Employee Ownership Trust Employee Ownership Trusts (“EOTs”) are becoming an increasingly popular way for business owners to transfer ownership of their companies to their employees. The UK Government introduced several tax incentives for EOTs in 2014, including a 0% Capital Gains Tax (“CGT”) rate on the sale of shares to an…
3 minutes read Mergers and acquisitions (“M&A”) are increasingly common however, the increasing frequency of M&A deals has raised concerns regarding the tax implications. There is a growing debate about whether Capital Gains Tax (“CGT”) rates should be increased for M&A transactions. Proponents of the increase argue that higher CGT rates will generate more revenue for…
4 minutes read Why do some advisors insist on using all the legal terms when discussing Employee Ownership Trusts structures (“EOTs”)? Are they wanting to make these transactions seem complex and expensive? Why do they only seek owners who are ‘altruistic’ or team-driven? This approach simply puts people off Employee Ownership Trusts and yet, with nearly…