Fiducia TogetherEmployee ownership
Selling a business to its own employees, often through a trust.
Please note: This page explains what a term means. It is general information, not legal, financial, tax or investment advice, and it does not know anything about your business. Before you sign, file or commit to anything, check it with an accountant, a solicitor, or the official guidance we link to.
What it means
An Employee Ownership Trust holds shares on behalf of all employees. A qualifying sale to one can be free of capital gains tax for the seller.
Why it matters
It is a genuine succession route for owners with no obvious buyer and a team that could run it, and the tax treatment is deliberately favourable.
What it looks like in practice
Conditions apply, including a controlling interest passing to the trust and equal benefit for all employees. Funding usually comes from future profits over several years, which is a real risk to the seller.
What to watch out for
Treating it as a way to avoid tax rather than a way to transfer a business. HMRC has tightened the rules, and the commercial substance has to be real.
Where to get proper advice
A corporate solicitor and a tax adviser with EOT experience. The Employee Ownership Association publishes guidance.
Where to read more
Last reviewed 2026-08-28 by Fiducia Together · Next review due 2027-08-28
Please note: This page explains what a term means. It is general information, not legal, financial, tax or investment advice, and it does not know anything about your business. Before you sign, file or commit to anything, check it with an accountant, a solicitor, or the official guidance we link to.