The UK Government reviewed EOTs in 2023. But no results yet. Here’s what you need to know while we wait.
The Key Benefits
EOT vs. EBT
Sounds similar, right? Not quite.
An EBT (Employee Benefit Trust) is broader. It holds shares for employees, sure, but it has lots of uses.
An EOT? It’s more focused. Tighter rules. Bigger tax advantages.
How It Works
Set up a trust.
Sell your shares to the trust (price checked by an independent valuer).
The trust owes you. It pays you back using future profits.
Simple? Sort of. But to get those juicy tax breaks, you’ve got to follow the rules:
The company must trade. No trading, no tax perks.
The trust needs to own more than half the company. Shares, voting rights, profits—you name it.
All employees must benefit equally. (Okay, slight tweaks allowed—things like pay, service length, and hours worked.)
Why Owners Love It
Why Employees Love It
The Catch
The Future of EOTs
More people are using EOTs. So, what’s next?
The Labour Party loves them. The Tories aren’t against them. Major changes? Unlikely.
But tweaks could happen:
The offshore rule might shake things up the most. Why? Lots of trusts use offshore trustees to avoid UK capital gains tax if they sell the company later.
The Bottom Line
EOTs are a win-win. Owners get a way to step back. Employees get a slice of the pie.
But like anything in business, the devil’s in the detail.
© 2025 Stephen Bray. Patterns in life and business — told simply.