The Future of EOTs: Less Tax Relief, Still Strong Potential
Hugo Persad, Trainee Solicitor in our Corporate Team, summarises the impact of reduced Capital Gains Tax (“CGT”) relief on sales to Employee Ownership Trusts (“EOTs”) following the Autumn Budget.
The Autumn Budget on 26 November 2025 introduced a number of new considerations for business owners. A major and unexpected change was the reduced Capital Gains Tax (“CGT”) relief on sales to Employee Ownership Trusts (“EOTs”).
Since the introduction of EOTs over a decade ago through the Finance Act 2014, EOTs have become an attractive route for business owners seeking to exit and also considering succession planning. One desirable appeal of EOTs was the 100% relief on CGT making it a beneficial and tax-efficient mechanism for an exit strategy. This made EOTs a desirable option for business owners who wanted to take a step back while also ensuring their business preserves its independence, culture, direction and allows for the business to remain in trusted hands.
While the Autumn Budget reduced the CGT relief available, it did not affect the core principles of selling to an EOT, and it is worth remembering that an EOT may still be a viable option for exit. A sale to an EOT can be significantly more streamlined than a traditional sale to a third party and there may still be many other commercial factors that could make an EOT the right fit. Likewise, there are instances where an EOT will not be appropriate. EOTs are still relatively tax efficient, so while the CGT relief is reduced, business owners will still benefit from an overall lower rate in comparison to that applicable on a third-party sale.
The sale to an EOT is still an attractive option for owners looking to make an exit, albeit the tax landscape is now slightly more equal. Importantly, it is not the only viable option. Business owners still have a range of exit strategies available to them each offering different advantages depending on their objectives, financial position and desired legacy.
To understand more about Employee Ownership Trust, or other exit strategies for your business going forward, please contact our Corporate Team by email at info@leathesprior.co.uk or by telephone at 01603 610911.
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Maternity Services in England: Recent Reports and What They Mean for Families
In a follow up to our recent article on maternity safety, Polly Langford, Partner in our Personal Injury & Clinical Negligence Team has written on the findings of the Ockenden Report and what this means for families.
Competing uses of farmland - what the new Land Use Framework means for your business
The Government has published the Land Use Framework – which DEFRA says is “a plan for delivering new homes, nature restoration, clean energy and food security." Rebecca Allen, Senior Associate in our Agriculture Team explains what this means and what to consider for your business.
Maternity Services in England: Recent Reports and What They Mean for Families
In a follow up to our recent article on maternity safety, Polly Langford, Partner in our Personal Injury & Clinical Negligence Team has written on the findings of the Ockenden Report and what this means for families.
Competing uses of farmland - what the new Land Use Framework means for your business
The Government has published the Land Use Framework – which DEFRA says is “a plan for delivering new homes, nature restoration, clean energy and food security." Rebecca Allen, Senior Associate in our Agriculture Team explains what this means and what to consider for your business.
Changes to qualifying period: Time to rethink probation periods?
From 1 January 2027, the qualifying period is reducing from two years to six months. But the reality is that the new law will apply to all employees who have already accumulated at least six months of continuous employment by this date. This means that now is the right time for employers to be reviewing their employment contracts and rethinking strategies on probationary periods.
Proposals for reform of cohabitation rights on the death of a cohabitating partner
Georgia Sartin, a Solicitor in our Property and Contentious Probate Team explores the government’s recent open consultation ‘a fairer end to relationships’ published on 5 June 2026, , in respect of the proposals for reform for cohabitants in the intestacy framework and 1975 Act claims.
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Who is accountable for maternity safety? The case for a maternity commissioner following the birth trauma inquiry.
The safety of maternity services in England has been under intense scrutiny in recent years, now, a national campaign has been launched for the appointment of a dedicated Maternity Commissioner.
What is the difference between a share sale and an asset sale?
When running a business, company founders and shareholders will inevitably, at one stage or another, want to consider potential succession options, the most prominent being an exit by way of trade sale. Hugo Persad, Trainee Solicitor in our Corporate Team provides an overview of what the difference is between a share sale and an asset sale.
UK GDPR Update: What the Data (Use and Access) Act 2025 Means for Organisations
While several updates under the Data (Use and Access) Act 2025 came into force on 5 February 2026, the next key development for organisations is still to come. From 19 June 2026, organisations will be legally required to implement a formal complaint handling process for data protection matters. This is a significant shift, placing greater emphasis on resolving issues internally before they escalate to the regulator.
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Selling a Probate Property: A Guide for Executors
Acting as an Executor can feel daunting, especially if there is a property which needs to be sold as part of the estate administration process. If you have been appointed as an Executor and you are unsure where to begin, here are some key things to consider.
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Leathes Prior's Personal Injury & Clinical Negligence Team Secure Settlement for Client
Kate Smith (Senior Associate) and Kimberley Nelson (Paralegal) were instructed in relation to a workplace personal injury claim, and successfully secured a five-figure settled for the client.
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New Restrictions to Charitable Giving: What You Need to Know
Changes to UK tax law regarding charitable giving took effect from 6 April 2026. Following legislative amendments in the Finance Act 2025-26, the generous tax exemptions associated with charitable gifts - specifically Inheritance Tax (IHT) exemptions - will be restricted to gifts to UK-registered charities. Ejike Ndaiji, Partner in our Wills, Trusts, & Probate and Charities Team explains...
Employment Rights Act 2026: The New Trade Union Right Of Access - Will it matter?
The Government has now published its response to the “Make Work Pay: Trade Union Right of Access” consultation which means we are now one step closer to properly understanding what these new access rights really will be.
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