There’s another way to sell your business

If you are thinking about retiring in the near future and you have a good management structure that already runs the business for you, or can be trained to do so, then you could consider having the employees buy the company from you via an ‘Employee Benefit Trust (EBT)’. There are tax breaks both for the seller and also for the employees.  The seller pays no capital gains tax on the sale of shares and once the shares are owned by the Employee Benefit Trust, the trust can pay bonuses to the employees’ tax free. Two main considerations to enable this to happen:
  1. The trust must hold more than 50% of the company
  2. All employees that receive benefits from the trust must all be included on the same terms.
If you meet all the conditions to enable an EBT to be set up then this could certainly be something to consider.

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