Introduction: Selling the shares in your company to an Employee Ownership Trust (EOT) can create major tax advantages during your lifetime, including 0% Capital Gains Tax (CGT) on the sale. However, it is advisable to plan for IHT as the proceeds from the sale will form part of your estate for IHT purposes.
At EotOwl, we help founders and shareholders plan not only for the sale itself but also for the long-term estate implications. Whether you’ve already completed an EOT transaction or are considering one, our IHT advisory services ensure that the full value of your exit can be passed on efficiently, and with minimal exposure to future tax liabilities. Typical planning strategies could involve the use of trusts, Family Investment Companies (FICs), making lifetime gifts, investing in a life policy etc. Our team are experts in quantifying liabilities and establishing sensible strategies to mitigate exposure to tax.
Why It Matters: Many business owners are surprised to learn that Inheritance Tax can still apply after a tax-free EOT sale, particularly if:
Poor IHT planning can result in 40% tax on part or all of the value of your assets, even if the sale itself was CGT-free. Without appropriate advice, the opportunity for Business Relief (formerly BPR) may be lost, and your estate could become liable for substantial tax that could have been avoided through advance planning.
Have our experts by your side.
Copyright © 2025 EotOwl. All Rights Reserved.
