Thomas Dalby (Gabelle) answers a query on a client that acquired, and now wishes to dispose of, a company with a UK-resident EBT holding a number of shares
Question
In 2007 our client acquired a company that had an UK resident employee benefit trust (EBT). The EBT held a number of shares that were standing at a gain at the time of the transaction and which were rolled over into ordinary shares in our client’s company. The shares have grown in value since the original transaction and our client is planning an exit in two years’ time. Senior employees have been promised a share of any exit proceeds. The client’s company cannot use any of the statutory share schemes. What are the implications of using the EBT’s shares to fund this promise?
Answer
EBTs are often established by companies to ‘warehouse’ shares acquired from exiting...
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Thomas Dalby (Gabelle) answers a query on a client that acquired, and now wishes to dispose of, a company with a UK-resident EBT holding a number of shares
Question
In 2007 our client acquired a company that had an UK resident employee benefit trust (EBT). The EBT held a number of shares that were standing at a gain at the time of the transaction and which were rolled over into ordinary shares in our client’s company. The shares have grown in value since the original transaction and our client is planning an exit in two years’ time. Senior employees have been promised a share of any exit proceeds. The client’s company cannot use any of the statutory share schemes. What are the implications of using the EBT’s shares to fund this promise?
Answer
EBTs are often established by companies to ‘warehouse’ shares acquired from exiting...
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