Guides
EOT Advisory
Employee Ownership Trust sales need a supportable, independent valuation. These guides explain the 2026 CGT position and what trustees expect.
EOT sales now sit at the centre of UK succession planning. The 50% CGT relief on qualifying disposals on or after 26 November 2025 still makes them tax-efficient, but the trustees need an independent valuation that will stand up to HMRC scrutiny.
What trustees actually need
A defensible market value, supported by adjusted earnings, sector multiples, and clear assumptions on deferred consideration. The valuation must be at or below open market value, never above, and the funding structure must be sustainable from post-tax trading cash.
The 2026 CGT position
For qualifying EOT disposals on or after 26 November 2025, 50% of the gain is relieved from CGT (the previous 100% relief no longer applies). The other 50% is taxed at the relevant CGT rate. Disqualifying events in the four years after sale can claw back the relief, so trustee composition, controlling interest, and the all-employee benefit requirement all need careful drafting.
Structuring the deferred consideration
Most EOT deals pay 20% to 40% on completion from bank or vendor loan notes, with the balance deferred over 4 to 7 years from trading profit. The valuation report sets the ceiling, the funding model sets the timetable. We work alongside your tax adviser and EOT solicitor so the three documents reconcile.
Topic deep dives
In-depth guides on the specific questions UK owners ask most often in this area.
- EOT Capital Gains Tax Rules in 2026: 50% Relief MechanicsEOT capital gains tax in 2026: 50% relief on qualifying disposals from 26 November 2025, conditions, trustee process, worked net-proceeds examples.Read guide
- Employee Ownership Trust Valuation: Trustee Process and HMRC EvidenceEmployee Ownership Trust valuation process: trustee instruction, information pack, adjusted earnings, market evidence, HMRC-defensible report.Read guide
- EOT Versus Trade Sale: UK Owner Comparison in 2026EOT versus trade sale for UK SMEs in 2026: after-tax cash, certainty, timing, employee outcome, cultural fit, 50% CGT relief mechanics compared.Read guide
Frequently asked questions
Is the EOT CGT relief still available in 2026?
Yes, but at 50% of the gain for qualifying disposals on or after 26 November 2025. The previous 100% relief no longer applies.
Who can prepare the EOT valuation?
An independent valuer instructed by the trustees, not the selling shareholders. The report must reach an open market value supported by adjusted earnings and sector evidence.
How is the EOT purchase funded?
Typically a mix of bank debt, vendor loan notes, and deferred consideration paid from future trading profit over 4 to 7 years. The valuation sets the ceiling; the model sets the timetable.
What is a disqualifying event?
A breach of the EOT conditions in the four years after sale, for example losing the all-employee benefit or majority trust control. It can claw back the CGT relief, which is why structuring matters.
Want a real number for your business?
Free, confidential indicative valuation from the BusinessValuation.co.uk team.