There are three main tax benefits to an Employee Ownership Trust (EOT):
- Capital gains tax relief for the existing owners disposing of their shares.
- A limited exemption from income tax on bonus payments of up to £3,600 per year paid to employees by companies owned by EOTs.
- Relief from inheritance tax on certain transfers into and from EOTs.
To secure these tax benefits there are various conditions that must be met. These will need careful consideration as part of any EOT transaction.