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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Spring Statement 2026 - An Overview
With the Government having restricted itself to one fiscal event a year in the form of the Autumn Budget, the Spring Statement is perhaps not the dramatic moment it used to be. It is more a chance for the Government to respond to events and economic forecasts than to set policy for the future.
Charity of the Month: Sue Lambert Trust
Leathes Prior is delighted to be supporting the Sue Lambert Trust as our Charity of the Month for February 2026. Sue Lambert Trust is a leading charity in Norfolk offering free therapeutic counselling and support services to survivors of sexual violence and abuse.
Supreme Court ruling set to impact NHS - Children injured by NHS can claim damages for lifetime lost earnings
In February 2026, the Supreme Court passed a ruling which is set to significantly increase the amount of damages the NHS may have to pay for claims brought in respect of children injured at birth, as a result of medical negligence.
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The Value of Planning Ahead: LPAs & Court of Protection
Putting LPAs in place allows you to choose trusted people to make decisions for you if you lose capacity in the future. This avoids the need for loved ones to make a costly and time-consuming deputyship application to the Court of Protection. With more people likely to experience conditions affecting capacity, more families may need to turn to the Court for support where no LPAs are in place.
Spring Statement 2026 - An Overview
With the Government having restricted itself to one fiscal event a year in the form of the Autumn Budget, the Spring Statement is perhaps not the dramatic moment it used to be. It is more a chance for the Government to respond to events and economic forecasts than to set policy for the future.
Charity of the Month: Sue Lambert Trust
Leathes Prior is delighted to be supporting the Sue Lambert Trust as our Charity of the Month for February 2026. Sue Lambert Trust is a leading charity in Norfolk offering free therapeutic counselling and support services to survivors of sexual violence and abuse.
Supreme Court ruling set to impact NHS - Children injured by NHS can claim damages for lifetime lost earnings
In February 2026, the Supreme Court passed a ruling which is set to significantly increase the amount of damages the NHS may have to pay for claims brought in respect of children injured at birth, as a result of medical negligence.
The Value of Planning Ahead: LPAs & Court of Protection
Putting LPAs in place allows you to choose trusted people to make decisions for you if you lose capacity in the future. This avoids the need for loved ones to make a costly and time-consuming deputyship application to the Court of Protection. With more people likely to experience conditions affecting capacity, more families may need to turn to the Court for support where no LPAs are in place.
The case of the fake cases: another judgment on AI-hallucinations in litigation
The use of AI Large Language Models in litigation continues to generate headlines (and consternation from the judiciary). In 2025, it seemed that rarely a month went by without a new case on fake AI-generated case law. December was no exception, and the High Court has now issued a further warning regarding the use of AI by litigants.
Autumn Budget 2025: Agricultural Property Relief & Business Property Relief Changes
It was announced in the 2025 Budget that from 6 April 2026, changes will be made to agricultural property relief and business property relief. These changes bring APR and BPR in line with the nil-rate band rules, meaning unused allowances can be transferred to a surviving spouse or civil partner. This is a significant step towards making estate planning easier for families who own farms or businesses.
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The Employment Rights Act 2025 is expected to come into force tomorrow (18 December 2025)
After an extended period of back-and-forth amendments between Parliament and the House of Lords, on 16 December 2025, the ERB finally received approval from the House of Lords, with the formality of Royal Assent due to take place tomorrow (18 December 2025). Head of LP Employment, Dan Chapman, explains...
Charity of the Month: The Matthew Project
Leathes Prior is delighted to be supporting The Matthew Project as our Charity of the Month for December 2025. The Matthew Project supports young people and adults across Norfolk, Suffolk, and Essex to overcome issues around drugs, alcohol, and mental health, empowering them to rebuild confidence and lead fulfilling lives.
Leathes Prior’s Milan Pandit appointed President of the Norfolk & Norwich Law Society
Leathes Prior Solicitors is proud to announce that Milan Pandit, Solicitor in our Corporate & Commercial Team, has been appointed President of the Norfolk & Norwich Law Society (NNLS) for 2025/26.
Commercial Lease Renewals: A guide for Landlords & Tenants
Commercial lease renewals are a topic that every commercial landlord and business that rents commercial premises should have at the forefront of their minds. It is essential for good succession planning, though it is often neglected until the expiry of an existing lease term is looming or once the existing term has come to an end and the tenant is holding over. In this article, our newly qualified solicitor, Maggie Berry explores the process that landlords and tenants can expect when navigating this complex area of law.
Our Guidance, Your Legacy: What is a Will, and why should I make one?
Not only is a Will one of the most important steps you can take to protect your loved ones and ensure your wishes are respected, but it also limits the likelihood of a claim/dispute following your death. To ensure your loved ones and the causes you care about benefit from your estate, a Will is essential to ensuring this happens. Find out more in this article.
Lease extensions: The essentials to getting started
Extending your lease can seem complex, but taking the right steps early can make the process much smoother. Jake Mowatt, Associate and Harry Smith, Trainee Solicitor in our Residential Property Team outlines the key essentials every leaseholder should understand prior to extending their lease.
Upcoming changes to bringing employment law claims: What these mean for you
The highly anticipated Employment Rights Bill (ERB) is set to increase the time limits in which employees can bring an employment tribunal claim. Gareth Stevens & Rose Woolterton explain what this means for employers & employees.
