Thinking About an EOT?
Brought to you by Hawsons | Proud Sponsors of the EOA
At Hawsons, we’ve helped many businesses transition to employee ownership. If you're considering your succession options, here’s a helpful guide to the questions we hear most often and the honest answers we give our clients.
What is an Employee Ownership Trust (EOT)?
An EOT allows a company to become majority employee-owned — without individual employees buying shares. Instead, a trust is set up to hold shares on their behalf. This structure gives employees a stake in the business’s long-term success while allowing the owner to step back over time.
Why choose an EOT?
An EOT is a fair, flexible way to exit — while keeping your company independent. Owners often tell us it feels like the right thing to do. It protects your legacy, rewards your team, and avoids a sale to a third party. Also, there are generous tax benefits for both sellers and employees.
What are the tax advantages of an EOT?
The sale can qualify for 50% Capital Gains Tax Relief if certain conditions are satisfied. Employees can also receive tax-free bonuses of up to £3,600 per year. These incentives are well-established and HMRC-approved—we’ll guide you through the details.
Who is an EOT suitable for?
EOTs tend to suit profitable, stable businesses with strong leadership teams. Many are owner-managed and value their independence and culture. We've supported transitions across sectors, including professional services, engineering, manufacturing and more.
How is an EOT transaction funded?
The trust usually pays for the shares using company cash and future profits. That means no debt for employees and no need to find external buyers. The sale is typically paid in instalments, making it a structured and manageable exit for the owner.
What changes occur after becoming employee owned?
After transitioning to employee ownership, the existing management team often continues to run the business. A trustee board is established to act in employees’ best interests whilst leaving management to make the day-to-day decisions.
How do employees typically respond to the transition?
With the right communication, employee reactions are overwhelmingly positive. We help clients plan their messaging to ensure the team understands what’s happening, what it means, and how the transition to employee ownership benefits them. It's a powerful moment in a business’s story.
How long does the transition to employee ownership usually take?
Most EOT transitions take three to six months. Hawsons will lead the process from start to finish, including valuation, structuring, trust setup, and employee communications. Our goal is to keep it smooth, practical, and focused.
Will I have to step away immediately?
Many owners stay involved after the transition to employee ownership, usually as directors, advisers, or trustees for example. Others choose to step back fully. The structure is flexible and designed to support whatever timeline works best for you and the business.
What are the ongoing requirements?
EOT-owned businesses need to meet some basic governance standards. These include annual reporting, trustee meetings, and ensuring that decisions are made in the employees' best interests. We support our clients with simple frameworks to keep everything on track.
Why choose Hawsons to be your EOT advisor?
We have been successfully advising UK businesses for over 170 years. Our approach to EOTs is personal, commercial and fully tailored. We take the time to understand what matters to you and your team and stay by your side long after the transaction is complete.
Read some of our EOT Case Studies to see why you should choose Hawsons.
Where do I start?
Just start the conversation. We can discuss your options, assess whether an EOT is the right fit, and guide you on the following steps: no pressure, jargon, or obligation.
Contact us now!
Pete Wilmer
Corporate Finance Partner
Jack Parker
Corporate Finance Manager
jp@hawsons.co.uk
