Employee Ownership Trusts

Employee Ownership Trusts

Employee Ownership Trusts (EOTs) were introduced by the UK Government to encourage companies to bring their employees into the ownership structure.The so-called ‘John Lewis model’ has a number of key benefits, including:

  • Allowing shareholders to sell some or all of their shares to a qualifying trust for full market value, without any charge to Capital Gains Tax
  • Proceeds can be deferred and paid out to selling shareholders as and when the company makes profits
  • Higher employee engagement, satisfaction, and retention 
  • An option for a full or partial business exit where a third party sale may not be desirable or possible

Although EOTs can be exceptionally attractive vehicles for business owners, it is vital that they are structured correctly from the outset and are appropriate for each client’s specific needs.  Implementing an EOT requires a multidisciplinary team of tax advisors, lawyers and structuring specialists. Through the Knox group of companies and our extensive network of trusted professionals, we are able to deliver a complete solution in a streamlined, cost-effective and professional way.

In the right circumstances, an EOT can be an excellent option for those looking to exit their business in whole or in part. Please contact us to discuss your circumstances and we would be delighted to assist.

How we help our clients

Working with other companies in the wider group and through our extensive network of professional advisors, we can deliver a full end-to-end service for businesses and individuals considering establishing an EOT.

This includes:

  • Tax advice for shareholders
  • Communication with employees
  • Establishing the trust, instructing experienced lawyers to ensure the terms achieve the key tax aims
  • Dealing with the transfer of shares, including completing or assisting with exiting shareholders’ tax returns if required
  • Establishing a corporate trustee to manage the EOT
  • Ongoing administration and management of the EOT


Find out more

For more information on Employee Ownership Trusts, please download our fact sheet.