Succession planning – An employee ownership solution

By Brabners LLP

23 Jun 2021

pexels-fauxels-3184396-1.jpg

If you hope to retire in the future, having a succession plan in place at least three years in advance will put you in a much better position and will enable you to explore your options.  You will want to consider all succession options and having experienced advisers to assist can ensure that you have taken all considerations into account, including all legal, financial and tax implications.

One option you might wish to consider when putting your succession plan in place is a sale to an employee ownership trust (an EOT). Employee ownership is an increasingly popular form of shareholder exit and should be considered if you are reluctant or unable to sell to a third-party buyer, you are concerned about the damage to the business’s legacy by exiting via the conventional routes and you see benefit in rewarding employees who have helped to grow the business. 

A disposal to an EOT can involve a sale of all the shares or of a majority shareholding (>50%) to the trustee of the EOT which holds the shares for the benefit of all the employees in the business. This means that no employees hold shares in their own right but rather the trustee acts as the custodian of employee ownership for the benefit of all staff.

A financial advantage of a sale to an EOT for current shareholders is that the proceeds of sale would not be subject to capital gains tax.  This is an important consideration, but the current growth in employee ownership is down to a combination of factors, including a desire to protect a business’s culture, a wish to incentivise employees and an understanding that employee ownership can lead to resilient and sustainable business performance.  

Provided that the various qualifying conditions are satisfied, employees of companies which are majority owned by an EOT are entitled to income tax-free annual bonuses of up to £3,600 per year. Independent research clearly demonstrates that employee ownership is mutually beneficial for employees, the business and the wider economy.

Securing an exit to an EOT requires expert legal guidance to ensure that the deal is structured effectively.  Brabners have a specialist employee ownership team who can guide you through the process and advise you on your succession journey.

Join us for EO Day 2021, a national celebration of employee ownership on June 25 2021, and shout about why business is #BetterTogether for the individual, the business and the economy.

Latest news

1

Three weekly domestic waste collection considered in plans Waste recycling Blackpool

Three weekly domestic waste collection considered in plans

01 Jul 2025

2

Graham Engineering confirms acquisition to a2e Industries Graham Engineering

Graham Engineering confirms acquisition to a2e Industries

01 Jul 2025

3

Training 2000 celebrate 'Good' rating by Ofsted Training 2000

Training 2000 celebrate 'Good' rating by Ofsted

01 Jul 2025

4

Fox Group acquires J Fisher and Sons Colin Fisher, Paul Fox CEO and Gary Fisher.

Fox Group acquires J Fisher and Sons

01 Jul 2025

5

Beever and Struthers strengthen leadership team with new partners Dean Curtis and Joe Diston

Beever and Struthers strengthen leadership team with new partners

01 Jul 2025

Background image for hub sign up block

LBV Hub

Leverage Lancashire Business View platforms

Post your news
Post your events
Post your offers
Build your network
Improve your SEO
Gain coverage in the magazine
Sign-up
Events
LBV123 July/August Launch Event
Lancashire Business View magazine launch
Networking
16 Jul 2025

LBV123 July/August Launch Event

Burnley

08:30 - 10:30

Lancashire Built Environment Conference 2025
BEC 315 X 315 Px
Networking
25 Sep 2025

Lancashire Built Environment Conference 2025

Blackpool Football Club, Blackpool, FY1 6HX

08:30 - 13:00

CMI Level 5 Management and Leadership Course
UCLanAerialCampus.jpg.jpg
LBV Hub Seminars
21 Feb 2025 - 21 Feb 2026

CMI Level 5 Management and Leadership Course

Preston Campus, Preston , PR1 2HE

09:00 - 17:00

CMI Level 5 Project Management Course
UCLanAerialCampus.jpg.jpg
LBV Hub Seminars
21 Feb 2025 - 21 Feb 2026

CMI Level 5 Project Management Course

Preston Campus, Preston, PR1 2HE

08:00 - 17:00

Business Bike Club – July
Chamber Logo1.png.png
LBV Hub Networking
01 Jul 2025 - 01 Jul 2025

Business Bike Club – July

Various, Lancaster, LA

08:00 - 09:30

Chamber Breakfast Networking – July
Chamber Logo1.png.png
LBV Hub Networking
02 Jul 2025 - 02 Jul 2025

Chamber Breakfast Networking – July

St John's Hospice, Slyne Road, Lancaster, LA2 6ST

08:00 - 10:00

The Marketing Metrics that Matter – July 4
LBV Hub Seminars
04 Jul 2025 - 04 Jul 2025

The Marketing Metrics that Matter – July 4

Door4 Office, Burnley Wharf, Burnley, BB11 1JG

08:30 - 11:00

Tri-Site Survey Equipment Showcase
unnamed (2).jpg.jpg
LBV Hub Seminars
09 Jul 2025 - 09 Jul 2025

Tri-Site Survey Equipment Showcase

Crow Wood Hotel, Burnley, BB12 0RT

09:30 - 16:00

Chamber Summer BBQ
LBV Hub Social
17 Jul 2025 - 17 Jul 2025

Chamber Summer BBQ

The Borough, Dalton Square, Lancaster, LA1 1PP

17:30 - 20:00

Preston Tech Connection: Web3 is Dead. Or is It?
July Longer Banner.jpg.jpg
LBV Hub Networking
29 Jul 2025 - 29 Jul 2025

Preston Tech Connection: Web3 is Dead. Or is It?

Society1, Coworking Space, Preston, PR1 3LT

18:00 - 19:30

Preston Freelancer Meet-Up: July
Longer July Banner.jpg.jpg
LBV Hub Networking
31 Jul 2025 - 31 Jul 2025

Preston Freelancer Meet-Up: July

Society1, Coworking Space, Preston, PR1 3LT

10:00 - 11:30

Cumbria Business Expo 2025
https---cdn.evbuc.com-images-880461633-4862066883-1-original.20241022-110415.jpeg.jpg
LBV Hub Exhibitions
19 Sep 2025 - 19 Sep 2025

Cumbria Business Expo 2025

Carlisle Racecourse, Carlisle, CA2 4TS

09:00 - 15:00

Advertise with us

Reaching 50,000 members, our print, digital and event platforms offer a fantastic way to raise your business profile and help you grow.

Find out more LBV122 Online Graphic
Subscribe now

Weekly news bulletin