Employee Ownership Trusts (EOTs) have seen a surge in popularity, aiding succession planning and boosting employee engagement. The UK government reduced capital gains tax relief from 100% to 50%, impacting owners considering EOTs. Changes aim to align EOTs with good governance but may hinder transactions in progress.

Despite concerns over recent tax changes, EOTs remain beneficial for both sellers and employees. Additionally, updates to enterprise management incentive (EMI) share option schemes aim to make EMI more accessible and attractive for companies. EMI criteria will be broadened, offering tax advantages and increased competition in talent acquisition.

From April 2027, EMI notification requirements will be removed, reducing compliance risk. EMI options will maintain favorable capital gains tax treatment, potentially including Business Asset Disposal Relief. However, inconsistencies in tax breaks between EOTs and EMI schemes raise questions about government promotion of all-employee ownership.

Read more at Yahoo Finance: EOTs gain traction with succession and productivity gains: BDO