The dysfunction which underpinned the credit crunch caused the UK government to commission research into whether alternative business structures could provide a more resilient framework. Academic research demonstrated that co-operatives mutuals and employee-owned businesses could be more resilient and more productive. EOTs were therefore formulated as a framework to allow existing businesses a simple formula to transition to employee ownership and involved an employee benefit trust which meets the conditions in IHTA 1984 s 86 acquiring a controlling stake in the company.
The EOT CGT and income tax rules were introduced in TCGA 1992 ss 236H–236U and ITEPA 2003 ss 312A–312I by FA 2014. These tax reliefs are the incentive for existing businesses to transition to employee ownership by providing a CGT-free sale for business owners and tax free (but not NIC free) bonuses for employees. Income tax rules which cover employee shares effectively...
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The dysfunction which underpinned the credit crunch caused the UK government to commission research into whether alternative business structures could provide a more resilient framework. Academic research demonstrated that co-operatives mutuals and employee-owned businesses could be more resilient and more productive. EOTs were therefore formulated as a framework to allow existing businesses a simple formula to transition to employee ownership and involved an employee benefit trust which meets the conditions in IHTA 1984 s 86 acquiring a controlling stake in the company.
The EOT CGT and income tax rules were introduced in TCGA 1992 ss 236H–236U and ITEPA 2003 ss 312A–312I by FA 2014. These tax reliefs are the incentive for existing businesses to transition to employee ownership by providing a CGT-free sale for business owners and tax free (but not NIC free) bonuses for employees. Income tax rules which cover employee shares effectively...
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