Employee Ownership Trusts still in play despite tax changes
Rob Buckland weighs up the evidence of a viable alternative to a more traditional sale
Hello Rainmakers,
Selling to an employee ownership trust (EOT) has become a popular and effective method of succession planning since they were introduced 16 years ago.
But a change to their Capital Gains Tax (CGT) treatment introduced last November has pushed down the number of inquiries about EOTs received by advisors, resulting in a fall in deals completed.
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So are EOTs still a viable alternative to a more traditional sale?
If the business owners are motivated purely by maximum tax avoidance, then it’s time to ditch any thought of an EOT and stick to a traditional trade sale.
