FA 2025 Sch 6 introduces some fundamental and far-reaching changes to the Employee Ownership Trusts (EOT) tax rules. HMRC view the changes as pure anti-avoidance to provide them with the tools to counter the undoubted abuse of the EOT tax reliefs.
The key changes are:
the trustees must be UK tax resident;
the majority of the trustees cannot be the vendors;
an extension of vendor claw-back period to four years;
confirmation that payments up to the EOT are taxable as dividends (with relief for payments which broadly cover the cost of buying the company); and
the trustees must not overpay for shares.
The changes take effect for EOT transactions on or after 30 October 2024.
Trustees and claw back period: It was always nonsensical that you could avoid a disqualifying event by using offshore trustees or that the vendors could be the majority of the trustees. Similarly ...
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FA 2025 Sch 6 introduces some fundamental and far-reaching changes to the Employee Ownership Trusts (EOT) tax rules. HMRC view the changes as pure anti-avoidance to provide them with the tools to counter the undoubted abuse of the EOT tax reliefs.
The key changes are:
the trustees must be UK tax resident;
the majority of the trustees cannot be the vendors;
an extension of vendor claw-back period to four years;
confirmation that payments up to the EOT are taxable as dividends (with relief for payments which broadly cover the cost of buying the company); and
the trustees must not overpay for shares.
The changes take effect for EOT transactions on or after 30 October 2024.
Trustees and claw back period: It was always nonsensical that you could avoid a disqualifying event by using offshore trustees or that the vendors could be the majority of the trustees. Similarly ...
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If you do not subscribe but are a registered user, please enter your details in the following boxes:
