Selling a controlling interest in your business to an employee ownership trust (EOT) can deliver significant tax advantages while securing its future in the hands of the people who helped build it. Getting the structure right from the outset matters, and specialist legal advice can be the difference between a transaction that works and one that leads to problems down the line. At BWS Law, our solicitors guide business owners through every stage of the EOT process, from early planning through to completion and beyond.
At BWS Law, our EOT work covers all aspects of employee ownership trust transactions, including:
An EOT sale involves more than a straightforward share transfer. The ownership structure, financing arrangements, and governance framework must all be designed to meet the qualifying conditions for tax relief and to serve the long-term interests of the business and its employees.
Our solicitors take the time to understand your business, your goals, and the needs of your workforce before advising on the most appropriate structure. We identify any issues that need resolving before completion, advise on how the purchase price will be funded, and work alongside your accountants and financial advisers to make sure the transaction moves forward without unnecessary delay.
The trust deed is the legal foundation of an EOT. It sets out how the trust is governed, how trustees are appointed and removed, how decisions are made, and how employees benefit. A poorly drafted trust deed can put the tax position at risk, create governance disputes, and cause problems that persist long after completion.
Our solicitors draft trust deeds and associated documents that are clear, legally sound, and designed around your business. We explain every provision in plain English so that you know exactly what you are signing and why.
The share purchase agreement governs the terms on which the selling shareholders transfer their shares to the EOT. It covers the purchase price, deferred consideration, warranties, and the protections available to both sides.
Our solicitors negotiate and draft share purchase agreements that protect everyone involved and reflect the commercial reality of the deal. We make sure the agreement aligns with the trust deed and the wider structure, and that it meets the conditions required for the capital gains tax exemption to apply.
The main tax attractions of an EOT are the capital gains tax exemption for qualifying sellers and the ability to pay employees income tax-free bonuses of up to £3,600 per year. Both depend on the EOT satisfying specific conditions under the Finance Act 2014.
Our solicitors work closely with your tax advisers to make sure the structure meets those conditions. We review the proposed arrangements, flag anything that could put the reliefs at risk, and advise on how to resolve issues.
Completing the EOT transaction is just the start. Trustees have continuing legal duties and must run the trust in the interests of the employee beneficiaries. Good governance from day one reduces the risk of disputes and helps the trust do what it is designed to do over time.
Our solicitors advise trustees on their duties and responsibilities, assist with trustee appointments and changes, and provide support on governance matters as they come up. We are available to help whether a question arises shortly after completion or years down the line.
Our solicitors have the expertise to guide you through an EOT transaction from first instructions to final completion.
We offer:
Our solicitors advise businesses of all sizes across the UK, bringing the breadth of experience you would expect from a larger firm without losing the personal touch that defines how we work. Our clients have direct access to experienced solicitors who understand their business, know their matter, and care about the outcome.
At BWS Law, we give every client the attention they deserve. We give advice that is legally sound and commercially sensible, explained in plain English without unnecessary jargon.
We are easy to reach and easy to work with. You will hear from us regularly, get answers quickly, and always know what is happening with your matter.
Quality work at a fair price
Our fees are genuinely competitive, and we are upfront about costs from the start. Years of experience in EOT transactions means we know where things tend to go wrong and how to keep matters on track, which saves clients time and money. We complete work efficiently and do not run up unnecessary cost.
If you are considering an employee ownership trust, contact us today to find out how we can help.
To find out more about how we can help, please call us on now on 01509 232611 or Click here to make an enquiry.
