EOTs: changes in the Finance Bill

Selling a company to an employee ownership trust (EOT) has become increasingly popular over the last few years largely due to the reduction in the benefit of business asset disposal relief since 2020 and also as people have become more aware that selling shares into an EOT is free of capital gains tax regardless of the scale of the transaction. The benefit is enhanced by the announcement of an immediate rise in capital gains tax rates so there is now a 24% tax saving on sale to an EOT.

There was a consultation on the EOT regime during 2023 but since the consultation closed that autumn we had heard nothing despite a number of fiscal events. So it was a slight surprise – particularly given the change of government and expectations of a radical budget on 30 October – that a policy paper...