Employee ownership trusts (EOTs) are trusts established for the purpose of acquiring shares from the current owners of a company and holding them for the benefit of the employees of the company, thereby allowing the employees to have indirect ownership of the company.

EOTs have become an increasingly popular option for transitioning business ownership due to their generous tax advantages, notably capital gains tax (CGT) relief for the outgoing shareholders and income tax relief on employee bonuses up to an annual limit.

What is EOT funding?