We recently worked with a local business which had never considered EOT as an option before. Here’s their story:
“The client, an established, regional recruitment agency, were intending to exit their business with family members taking over the reins of the company as part of a natural succession plan. However, due to a change in these circumstances, coupled with changes within the industry, this exit strategy was no longer viable – so they asked for our advice on alternatives. “After reviewing and discussing the options of exiting the business, we raised the idea of using an EOT. The merits of this approach for the client were that it enabled them to reward loyal and key staff, reduce their overall tax exposure, and have a readymade purchaser of the business - making the sale process quicker than a trade sale would have been. For staff, it meant they would have greater control of the direction of the company, and removed any risks to their jobs and career prospects which may have come from a sale to another business. “A detailed review was undertaken to ensure this approach was right for the business, the staff and the owners and that the company met the necessary qualifying criteria to proceed. Then, working alongside the client’s legal advisors, we took the owners through the whole process, step-by-step, so they had a clear understanding of each stage, as well as the benefits and obligations along the way. “As a result of what turned out to be a smooth process to create trust and communicate what was happening to all those involved, the owners were able to exit the business tax efficiently, in the knowledge that the company would continue in the safe hands of their staff. We now support the new trust with its ongoing management and financial commitments and already see a bright future for the business.”
Stuart Sheldrick // Director
P16
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