EOTs are rapidly becoming a popular means of enabling company owners to realise the value of their companies without abandoning the workforce to new management in an external takeover. The UK government encourages employee ownership by offering tax reliefs for those adopting this model.
An EOT is a trust which holds a controlling interest in a company for the benefit of its employees. This form of employee ownership model has become increasingly popular as a number of pioneering companies adopting this structure have become some of the most successful in their markets, with loyal and well motivated staff. The UK government encourages employee ownership by offering tax reliefs for those adopting this model.
EOTs are rapidly becoming a popular means of enabling company owners to realise the value of their companies without abandoning the workforce to new management in an external takeover. The sellers may receive the full market value of their shares, normally funded by the company out of its profits over a period of years, and often with the support of bank borrowing. Meanwhile, the employees are likely to feel more secure and better motivated in the knowledge that the company is now owned entirely for their benefit and, once the proceeds have been paid to the sellers, without any need to support dividends and other distributions to founders or external shareholders.
The following is a brief summary and should not be relied on alone. The tax reliefs are as follows:
However, the trustees are permitted to waive dividends if the trust deed allows them to do so.
If any of the above conditions ceases to be met before the end of the tax year following the year in which the relief was claimed, the CGT relief is withdrawn and the sellers of shares to the EOT are charged to tax on their gains.
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"Fiduchi's Online Share Plan Administration portal, has saved time, money and paper, and [it] allows us to become more efficient in the managing of our employees share awards. It's really fantastic what an impact this platform has made."
Micheal S
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Onboarding of your data to our online platform is easy regardless if you choose a fully-managed or self-service in-house solution. By making the switch to our platform, you can upgrade from having to manage your share plan data on complicated spreadsheets. Plus to make the process as simple as possible, our experts will guide you every step of the way and we also provide helpful guides.
For businesses who opt for our fully managed solution, our platform is able to deal with each business's unique requirements. When it comes to dealing with exact legal and regulatory issues, our platform will be able to automatically determine the actions required for each award or vesting, specific to the country in which the company operates. Therefore minimising the risks and allowing full compliance from a legal and regulatory position.
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Our platform can be branded to match your company's own brand, therefore becoming a professional extension of your employee benefits. You can set role-based access and let your employees and shareholders log into their own online branded share platform anytime, anywhere and see exactly what shares they have and how much they are worth. They can also easily accept grants, exercise options, calculate potential payouts and more.
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Our experienced team are here to answer any questions you may have. With a wealth of knowledge and expertise, they will be able to advise you on right solutions to meet your needs. You can rest assured that core to the Fiduchi principles are how your interests should best be met.
Our experienced employee services team are here to answer any questions you may have regarding all types of employee incentive plans. With a wealth of knowledge and expertise, they will be able to advise you on the best solution that meets your business needs.