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ARTICLE · 11 NOVEMBER 2024

Budget 2024 And Employee Ownership Trusts (EOTs)

Jurit LLP
Jurit LLP
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New rules on Employee Ownership Trusts (EOTs) restrict former owners' control post-sale, mandate UK-resident trustees, enforce market-value share sales, and extend the vendor clawback period. These measures strengthen EOT governance and enhance their appeal for business succession.

United KingdomTax
Jeremy Glover
Jeremy Glover

In the Autumn Budget, the Government announced a number of changes to employee ownership trusts (EOTs).

The changes come following a consultation on EOTs that took place between July and September 2023. The Government has now published its response to the consultation, announcing a raft of changes from restricting the control that former owners of the company can have on a sale to an EOT, to rules around Trustees of EOTs residing in the UK.

Jeremy Glover, one of the UK's leading legal advisers on EOT transactions, explores what was announced and the effect this will have.

Control

After the sale of shares to the trustees of an EOT, the vendors will no longer be able to form the majority of the board of directors of the EOT.

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