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Back to basics: Employee ownership trusts

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Employee ownership trusts (EOTs) can be a platform for creating or building on an employee-focused culture, resulting in increased levels of employee engagement and incentivisation. The EOT rules provide: an exemption from CGT on certain disposals of shares to an EOT; limited relief from income tax on bonuses (up to £3,600 per year per individual paid by an employer company owned by an EOT); and relief from IHT on certain transfers into and from EOTs. EOT ownership provides business owners with an attractive exit strategy that does not require an external buyer: a sale of a company to an EOT can be free of CGT.

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