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Legal Due Diligence & Tax Planning for Employee Ownership

Updated: Apr 19, 2023

Preparing for employee ownership

employee ownership

Our specialist legal partners have a wealth of experience with previous successful transitions to employee ownership. Our legal partners will conduct a legal review to identify any potential impediments or structural issues which may delay transition to employee ownership.

Tax planning for shareholders ensures that the business structure and transaction is tax compliant qualifying for full Capital Gains relief and is pre-approved with HMRC. For employees, this could involve placing shares within employee share schemes and minimising income tax liability.

Providing the EOT holds more than 50% of the company shares, the vendors qualify for full CGT relief. Employees can receive a profit share from the company and pay no income tax on the first £3600 each per year.

Complementing the Employee Ownership Trust, direct shares schemes can be implemented such as Share Incentive Plans and Enterprise Management Incentives. This can be a useful tool for linking objectives with incentives and for attracting new talent into the company.

Call us on 01384 274 778 / 075 888 925 88 to discuss or go ahead and book a free consultation to explore your options.

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