"After a decade of rapid growth, Britain's employee ownership movement is hitting the brakes. New tax rules introduced in last year's Budget have curbed the number of business owners selling to their staff, following a clampdown on offshore trusts used to sidestep capital gains tax (CGT). The Employee Ownership Association (EOA) reports that company sales to employee ownership trusts (EOTs) fell from 550 in 2024 to just 200 in the first eight months of this year."
"Only 104 EOTs were cleared by HMRC in the three months to June, the lowest level since early 2022. Experts say the decline follows reforms designed to close tax loopholes exploited by some sellers. Previously, company owners could transfer their businesses to offshore EOTs, whose trustees would quickly resell the company to another buyer, allowing the original owners to pocket the proceeds tax-free."
Britain's employee ownership movement has slowed significantly after rapid expansion. New tax rules introduced in last year's Budget ban offshore structures and impose a four-year clawback on CGT relief, up from one year. Company sales to employee ownership trusts fell from 550 in 2024 to about 200 in the first eight months of this year, with totals expected around 350 for 2025. HM Revenue & Customs cleared only 104 EOTs in the three months to June. The reforms target schemes that allowed sellers to use offshore trustees to resell businesses tax-free. EOTs were introduced in 2014 and grew to about 2,500 trusts.
Read at Business Matters
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