Employee Trusts

Employee Trusts

Fiduchi Employee Services team has a wealth of experience in the design, implementation and administration of employee incentivisation schemes for corporate clients globally. Our team of professionals can help you create the right flexible and tax-compliant structures to help reward, incentivise and retain key employees.

Employee Benefit Trusts, Employee Ownership Trusts & Onshore and Offshore Employee Trusts

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Fiduchi is an independent owner-managed financial services business which allows us to deliver bespoke solutions that others may not be able to offer. One reason why Fiduchi’s existing clients have chosen us as their trusted advisor is our ‘work with you, not against you’ approach.

How we can help with your Employee Trusts

The administration of employee trusts plans can be a significant resource burden for an employer, mainly if there are regular events requiring action (new awards, joiners and leavers, participants wishing to buy or sell shares and more). Fiduchi is able as an experienced provider of employee trusts to relieve companies of this burden on a cost-effective basis by handling the following:

  • Dealing in shares and other assets;
  • Employee communications (including online access to award information);
  • Record-keeping;
  • Tax reporting;
  • Company secretarial and other regulatory formalities;
  • In the case of Employee Ownership Trusts (see below), acting as the controlling shareholder taking account of guidance from an appropriate advisory committee of the company.

Fiduchi has expertise in the formation and management services in respect of trusts which may be resident either in the UK or in Jersey. A range of tax and other implications arise from the choice of residence of the trust and tax advice should be taken in all cases. For example, some types of schemes, such as the tax-advantaged Share Incentive Plans (SIPs) in the UK, are required by law to hold shares in a UK resident trust. Fiduchi can, therefore, provide independent trustee services to support such plans.

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What is an Employee Benefit Trust?

Employee Benefit Trusts (EBTs) are widely used by companies to attract and retain staff. They can both provide a range of advantages in structuring employee incentive arrangements and tax benefits for employers.

An EBT is a discretionary trust established by a company to hold cash, shares or other assets for the benefit of the employees of the company or group of companies. It is constituted by a Trust Deed which sets out the purposes and powers of the trustees.

Usually, the Trust Deed provides the trustees have discretion as to how the trust funds are to be applied. In exercising their discretion, they are required to act solely in the interests of the beneficiaries. The beneficiaries are usually all employees, former employees and their immediate families. Typically, in their decision making the trustees may take account of wishes expressed by the employing company.

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Why use an Employee Benefit Trust?

One key reason to use an EBT is if the employing company is a private business, its shares may be difficult to sell in the absence of a (public) market. Thus, an EBT can act as an internal "warehouse" to hedge against future obligations arising from the granting of awards or to serve as an internal marketplace.

This enables participants of the company's share schemes a real prospect of realising the value of their shares in due course without having to wait for any form of corporate exit event such as a sale of the company. It also substantially enhances the perceived value of the shares by the participants, particularly where, as is common, share prices are determined at regular intervals by an independent valuer and communicated within the company.

What is an Employee Ownership Trust?

An Employee Ownership Trust (EOT) is a tax advantaged arrangement which allows the owners of a company to sell a controlling shareholding to a specially designed trust, free of tax. It also allows the company to pay tax free bonuses to staff of up to £3,600 each per year. The trust must meet certain requirements designed to ensure that the company is owned and controlled for the benefit of the employees as a whole.

London night time skyline

What you need to consider

Often, the share price internal market is funded by regular contributions from the employer out of its profits. The trustees are then able to buy shares from leavers and recycle them to joiners, promotees and so on (often, on the exercise of share options granted by the company), as appropriate.

The legal ownership of the fund is held outside the employing company, and participating employees, therefore, enjoy the comfort of knowing that the funds are safe and administered by independent professionals whose actions are governed solely by the interests of employees generally. Additionally, the fund is held independently and protected against claims by creditors in the event of failure of the company.

Testimonials

"THANK YOU TO OUR GUARDIANS!

I would like to extend a BIG thank you to the Fiduchi team for taking such good care of me and my business. It's reassuring to know that there are some guardian angels out there to look after us."

Founder & CEO - SUPERLUXE Events

"Thank you very much for your professional assistance (and patience) in helping us transfer our shares and assets into the new Trust. I know that it has taken longer than expected. Still, your professionalism and continued support have helped us achieve the desired outcome."

Chairman and CEO

"My sincere thanks for the assistance you have provided the advisory committee by coordinating directly with the charity to formalise an agreed donation plan."

Private Client (Charity)

"Many, many thanks for your hard work and speed at setting up our client's Private Investment Company in just 24hrs! Your flexibility and communication throughout the whole process have been appreciated, and the feedback has been tremendous......

Thank you."

Major UK Law Firm

"Thank you, everyone, for delivering this significant re-structure to our family assets and within a very tight timeframe.

Great to get this finalised!"

Mr. C - Private Client

"THANK YOU TO OUR GUARDIANS!

I would like to extend a BIG thank you to the Fiduchi team for taking such good care of me and my business. It's reassuring to know that there are some guardian angels out there to look after us."

Founder & CEO - SUPERLUXE Events

"Thank you Fiduchi for the design and implementation of our corporate pension scheme. Your expertise combined with technological platforms, have allowed us to create a bespoke retirement savings product which allows our employees. Throughout the whole process you have proven to be professional, skilful and enjoyable partner to work with."

Mr. R E - Managing Partner - H Ltd.

"We consider Fiduchi an important strategic partner of ours. Over the years they have proven themselves to be professional and extremely thorough. Combined with this professionalism, they are always a pleasure to deal with and we are pleased with their service levels."

Mr. P.E, Managing Director, W Ltd.

“I am very impressed with the professionalism and efficiency Fiduchi Limited demonstrated during the establishment of our employee benefit trust. They coordinated the process seamlessly and provided us with valuable advice and guidance to ensure compliance with our regulatory and legal responsibilities. Throughout my engagement with the team, I have found them to be approachable and easy to work with.”

Mr. P.B. FE Ltd.

"Thank you for helping us with the establishment of our real estate fund."

Startup Fund Manager

"Thank you so much for helping my client register their vessel with the Red Ensign Group and all the other advice and support you provided!"

Trusted advisor to Yacht Owner.

"Fiduchi's yacht team provides a first-class service! In particular with assisting us with our crew banking requirements and payroll services. Whenever we need assistance, they are just a phone call away!"

Superyacht Captain

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