Business owners are increasingly utilizing Employee Ownership Trusts (EOTs) to sell their companies tax-free due to shifts in capital gains tax (CGT) regulations and rising national insurance costs. Recent data shows a 40% increase in EOT applications. EOTs provide full CGT exemptions and allow sellers to receive payments over several years while retaining partial ownership. Martin Cooper from RSM highlights the appeal of EOTs as both financially beneficial and a way to leave a legacy. There are currently over 2,250 employee-owned businesses in the UK, demonstrating a significant trend towards this ownership model.
"There's no doubt EOTs have taken off because the tax relief is now far more attractive," said Martin Cooper, a partner at RSM.
EOTs allow company owners to sell a controlling stake in their business to employees, avoiding a CGT bill entirely.
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