Employee Ownership Trusts (EOTs)

Inject new life into your business by transferring ownership to employees.

Giving employees a stake in the business for which they work has been proven to bring many benefits, from increased productivity to reduced absenteeism. In addition, transferring shares to employees via an employee ownership trust can be quicker than a sale to a third party, and brings many tax advantages. Explore how you can make staff true partners in your business and how we can help you transfer shares to an EOT.

Setting up and managing an employee ownership trust

We can support you to set up an employee ownership trust, provide you with the necessary tax advice and obtain clearance from HMRC for the trust. We can also draft the trust documents, liaise with shareholders and employee representatives, help you choose trustees and obtain the company valuation.

Our specialist employee incentive solicitors can help your business by:

  • Showing you how to maximise the tax advantages of setting up a trust, including inheritance tax, income, and capital gain tax reliefs, and advising you on how to avoid failing to meet any qualifying rules.
  • Supporting you to obtain a market valuation for your company and advising you on how to calculate the purchase price.
  • Liaising with your existing shareholders including those who don’t intend selling to the EOT.
  • Helping you decide how the sale will be funded, whether that’s via a loan or paid over time out of profits.
  • Working with your employees to explain to them how the employee ownership trust will work, and how they can maximise the advantages of working in an employee-owned business.
  • Helping to choose trustees for the EOT.
  • Obtaining HMRC clearance.
  • Reviewing your company’s legal documents and management structure as well as your shareholdings and provide legal advice as to how these may need to change as a result of the EOT.
  • Drafting the necessary documents making sure everyone’s interests are protected as far as possible and balancing the risks and rewards.
  • Completing the share sale to the EOT.

What our clients say

We pride ourselves on delivering an excellent service for clients, but don’t just take our word for it.

How an employee ownership trust will benefit your business

Research has shown that selling to an employee ownership trust improves both employee and company productivity. It also improves staff morale and can decrease absenteeism.

Selling shares to an EOT can be a much quicker and simpler transaction than selling shares to a third party.

Selling to an EOT can bring many advantages for participants, including inheritance tax, income tax and capital gains tax savings.

Who we help: Start-ups and scale-ups across a range of sectors

We support a wide range of UK-based companies that are thinking of selling, either to a third party or to employees. If you feel that selling to an employee ownership trust would be a good option for you, or simply want to understand how they work, get in touch. It’s vital to take good legal advice at the appropriate stage in your formation of an EOT in order to avoid unexpected tax charges, to make sure the sale goes through without a hitch, that you have appropriate trustees in place, and that your EOT gets pre-clearance from HMRC.

Why choose Harper James Solicitors?

We can assist you to understand the benefits and disadvantages of EOTs. Our corporate specialists have a wealth of experience in setting up and advising EOTs and we are experts in obtaining pre-clearance from HMRC for trusts. We can provide you with the support necessary to progress sales swiftly, working with you, your shareholders, and employees to troubleshoot potential issues.

Beyond that, we can also provide you with commercial legal advice across a broad range of services, ultimately offering you a fully integrated approach to all the legal support you may need, aligning with your objectives as your business develops. Plus, we have all been recruited from top UK law firms or from large businesses and have advised clients both as external advisors and as in-house corporate counsel.

Find out more about the team here:

Pricing plans

Our three transparent pricing packages are designed to give you the widest possible access to high-quality legal advice, whatever the size and nature of your business:

City

Straightforward access to senior solicitors at a competitive rate.

An affordable solution for businesses needing one-off legal support. Receive ‘City’ partner-level expertise at a fraction of ‘City’ prices.

Enterprise

Have legal peace of mind for £189 per month with additional support from £99 per hour.

A monthly subscription legal support package specifically designed for start-ups and smaller businesses.

On-Demand

For businesses requiring 60+ hours of support a year, with prices equivalent to £99 per hour.

Fully account managed quarterly subscription service for businesses with more complex legal needs.

What next?

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A national law firm

We mainly work remotely, so we can work with you wherever you are. But we can arrange face-to-face meeting at our offices or a location of your choosing.

Our commercial lawyers are based in or close to major cities across the UK, providing expert legal advice to clients both locally and nationally.

Floor 2, Cavendish House, 39-41 Waterloo Street, Birmingham, B2 5PP
Stirling House, Cambridge Innovation Park, Denny End Road, Waterbeach, Cambridge, CB25 9QE
10 Fitzroy Square, London, W1T 5HP
13th Floor, Piccadilly Plaza, Manchester, M1 4BT
Harwell Innovation Centre, 173 Curie Avenue, Harwell, Oxfordshire, OX11 0QG
2-5 Velocity Tower, 1 St Mary’s Square, Sheffield, S1 4LP

Our other locations

Immeuble Danica B, 21, avenue Georges Pompidou, Lyon Cedex 03, Lyon, 69486