Lee Sharpe looks at one of the most underrated tax-saving arrangements for the business.
In tax terms, trusts have largely been poorly served, going back at least as far as the ‘reforms’ of April 2006 (and arguably years before then); which is strange, because they are commonplace and widely seen in pensions, life insurance products and property arrangements, for example.
It is probably fair to say that we typically settle on a trust vehicle these days in spite of the tax consequences, rather than because of them. A new government-approved trust vehicle that saves tax is a rare thing indeed.
Employee ownership trusts
The special tax regime for employee ownership trusts (EOTs) was introduced by Finance Act 2014 (FA 2014, s 290, Sch 37), offering an alternative to a third-party sale, or a more traditional management buyout. Broadly, EOTs comprise a sub
