EOT transition
Guiding your move to employee ownership, clearly, calmly, and confidently.
Why EOT expert?
My EOT transition services are designed to guide you from first idea to completion, offering the right level of support for where you are in the process. Whether you’re exploring your options, ready to move forward, or want comprehensive guidance from start to finish, there’s a service designed to fit.
With over 25 years’ experience and more than 80 EOT projects delivered, I combine technical precision with practical insight to make the process smooth, compliant and rewarding for founders, teams and the business they’ve built.
EOT explore
EOT core
EOT complete
Pricing
Fixed price of £3,750 (plus VAT) in person meeting or £3,250 (plus VAT) via Teams.
Every EOT project is different, but my approach to pricing is simple and always has been: clear, fixed and fair. Once we’ve discussed your project and the level of support you need, I’ll provide a fixed fee that covers all the agreed legal work, with no hidden extras.
FAQs
For Business Owners
What is an Employee Ownership Trust (EOT)?
An EOT is a UK trust that buys and holds a controlling interest (usually 100%) in a trading company for the long-term benefit of all employees. It’s designed to secure independence, succession and broad-based employee benefit.
What are the main tax advantages of selling to an EOT?
If the qualifying conditions are met, sellers can claim 50% Capital Gains Tax relief on the sale proceeds (capital element only). Under current rates of CGT this means a 12% tax on the proceeds instead of 24%. Interest on any deferred consideration is taxable as income in the normal way.
What does “controlling interest” mean in this context?
Broadly, the EOT must control the company after the sale, meeting the “all-employee benefit” requirement and related conditions set out in the Capital Gains Tax rules. In practical terms, most transitions sell a majority or 100% of the ordinary share capital to the EOT.
Does Stamp Duty apply on the share transfer to the EOT?
Yes, EOT acquisitions are still subject to 0.5% Stamp Duty on share transfers in the usual way. (The EOT relief is a Capital Gains Tax relief for sellers; it does not remove Stamp Duty.)
How is the price determined; can it be “whatever we agree”?
It must be market value. Sellers and Trustees should be able to evidence a robust independent valuation. HMRC guidance expects the trustees to take reasonable steps to ensure both price and any interest rate are commercially reasonable.
How is the purchase funded?
Commonly via a modest upfront payment and a vendor loan repaid over time from company profits contributed to the EOT, while maintaining headroom for working capital, investment and a tax-free all-employee bonus.
What are “disqualifying events”?
Events such as the EOT ceasing to control the company, or the trust applying benefits other than on the required all-employee basis, can disqualify the tax incentives and trigger a clawback from sellers or the EOT. Good governance and careful drafting help avoid them; trustees and the board should monitor compliance carefully.
Can we still incentivise senior leaders?
Yes, through pay, discretionary bonuses, LTIPs or tax-advantaged options like EMI share schemes, provided these operate alongside (not in place of) the EOT’s all-employee benefit principles. Care needs to be taken that such schemes do not create unintended friction in the future.
What’s included in EOT explore?
What's the benefit of EOT explore?
- A clear understanding of EOT suitability for your business.
- Expert analysis of your company’s structure, financials, and ownership goals.
- A breakdown of key benefits, including tax incentives and long-term stability.
- Identification of any potential challenges or barriers.
- Practical next steps should you choose to proceed with an EOT.
“For some time I had been looking for an exit but selling the company via a trade sale would leave our loyal staff with an uncertain future. I wanted all of the team to have the security and continued opportunity to benefit from their hard work long into the future. An Employee Ownership Trust ticked all of the boxes.
James (VFDNet) showed us the way and came highly recommended. He recruited Christian of Spencer West to complete the legal side of things. We could not have had a better team to take us through to completion in record time. Thank you James for your forensic project management and Christian for explaining the legal aspects in plain English.
I would, without hesitation recommend you both.”
Grapevine Telecom.
What’s included in EOT core?
The following identifies the critical parts of an EOT project which are essential to complete the project successfully. We will work through the project with regular zoom/team calls to deal with each part of the project.
Core legal documents
The core legal documents which need to be prepared in consultation with you are as follows:
Employee Ownership Trust deed
This is the trust document which is at the heart of an EOT. It sets out how the shares in the company are owned for and on behalf of the beneficiaries. It also establishes who the trustees are and how they should be selected.
Share Purchase Agreement
The SPA is the document which sets out the commercial terms for the sale of the shares from the existing shareholders to the EOT. It will establish the sale price and the terms on which the price must be paid. It will also include warranties and a number of other provisions which we consider.
Founder Shareholder Agreement
This is an operational agreement which has a number of practical controls on the company which will be reassuring to both the company, the trustees of the EOT and the former owners.
New company Articles
As an employee-owned company, it is necessary to update the company’s articles to reflect its new structure and consider some additional clauses that are useful for EOT owned companies.
Written Project Reports
A number of reports will be provided to you as part of the project:
EOT explore document
This will form part of the early stage of the project and be utilised to define the desired end goals. Through it we will also review the critical compliance aspects necessary to comply with the relevant sections of the Capital Gains Tax and Income Tax legislation pertinent to EOTs. This will be updated through the project so that on completion the Company will have a record of decisions made.
Final Report
This will provide a guide to all of the core documents as finalised through the project. This can be very helpful in having one report which sets out the key matters addressed in each document.
Completion Bundle
All of the final documents will be bundled into a single pdf document which can then be retained as a comprehensive set of documents for future reference.
Ancillary Documents
There are multiple ancillary documents which need to completed as well (though these are secondary to the core documents above):
Company Board minutes, approving share transfers, forming the EOT, making financial contributions.
PSC Register updates, showing changes to ownership at Companies House.
Stamp Duty filing, this is payable by the Company at 0.5% of the total purchase price.
Appointments/retirements of directors, if any take effect on completion.
What’s included in EOT complete?
In addition to the services included in EOT core, we can also provide optional enhanced support, which some businesses find very reassuring:
- Regular fortnightly meetings throughout the project.
- Two in-person meetings at critical points of the project.
- Review of Project with leadership / exec team and Trustees.
- Weekly catch-ups in the month before anticipated completion.
- Post completion attendance at the first two trust meetings to support the trustees and help design trustee meetings.
- Six months post completion EOT assured support.
Project Blue Flame
Deal of the Month
Prima Bakeries & Ison Harrison
Leading Partner
2023, 2024, 2025
Related resources
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