The trend of Employee Ownership Trusts (EOTs) has been continuously on the rise this year; a trend that Ashfords have been on the sharp end of.
An EOTs is a tax efficient vehicle by which business owners can transfer the ownership of a company to a trust for the benefit of the employees as a whole. This is attractive to business owners as it is capital gains tax free and the terms of the sale are often much less onerous that for third party trade buyers.
Partner and Head of the Corporate team at Ashfords, Andrew Betteridge, has significant experience in this area, having already completed over a dozen EOT employee ownerships in the last year. ‘A lot of owners like the idea of allowing their staff to benefit from the business and ensure the independence of the business for the future. This structure has not only allowed that to happen, but also allowed the owners to achieve an exit with no capital gains tax to pay’. Indeed, there are many benefits to EOTs including increased employee satisfaction and engagement, as well as improved business performance.
Just one recent example of Ashfords’ involvement with EOTs was with one of the UK’s leading advanced manufacturing specialists, Retrac Group. The Swindon-based company was previously owned by the Carter family for some 50 years. Retrac Group have a reputation for innovative and manufacturing excellence and are specialists in the Formula 1, aerospace and automotive sectors. The 115-strong workforce acquired the company through an EOT in an eight-figure deal; thus they are now the beneficiaries of the company’s future success.