Creating legacies with employee ownership

by Tracy Evans

20 November 2023

Unlock the full potential of your business with an Employee Ownership Trust (EOT) – the cornerstone of employee motivation and sustaining long-term commercial success.

Transitioning to an EOT is not just a change in ownership; it’s a strategic move to extract the utmost from your key personnel whilst achieving a significant tax saving. Such transition in ownership empowers your employees and fuels their commitment which can be further enhanced with the adoption of an Enterprise Management Incentive (EMI) which offers tax-efficient share ownership. By entering the realm of tax-efficient share ownership, we are here to help you understand how to safeguard the EOT status and control participation.

  1. Safeguarding your EOT status is vital to retain the tax benefits linked to employee ownership for both the original sellers and employees. The trust must maintain control (≥50%+1) by managing the issuance in the number of shares. Too many shares can tip the scales, triggering significant tax consequences.
  2. Controlling participation of employees, to prevent the issue of a person becoming an “excluded participator” by owning 5% or more of the shares. The 5% ownership threshold is a critical juncture; by breaching it, individuals become “excluded participators” which will prohibit them participating in the interest owned by the EOT.


At EMW, we bring a wealth of experience tackling all the above considerations, specialising in crafting tailored employee share schemes for private companies. If you’re contemplating the transformative leap into direct employee ownership.

Contact us to embark on this journey of empowerment and business elevation as your trusted partners.

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