EOT Advisory
EOT Versus Trade Sale: UK Owner Comparison in 2026
The 50% relief has rebalanced the EOT-vs-trade-sale comparison. Here is the honest head-to-head for 2026.
Until late 2025, EOTs almost always beat trade sales on after-tax cash thanks to 100% CGT relief. The 50% relief regime has tightened the gap. For some owners EOT still wins clearly; for others the trade route now delivers more in the hand. This guide compares both routes honestly across after-tax cash, certainty, timing, cultural fit, and personal preference.
After-tax cash: the new maths
EOT disposals from 26 November 2025 carry an effective CGT of approximately 12 percent on half the gain; a trade sale is taxed at 14 percent on the first £1 million BADR slice and 24 percent above. Trade sale CGT is 10% on the first £1m of qualifying gains (BADR) and 24% above. On a £4m gain, the EOT delivers approximately £3.52m net; a trade sale delivers approximately £3.06m to £3.20m net. EOT is £300k to £450k ahead in cash.
Trade buyers, however, frequently pay 10 to 30% above open market value when there is strategic synergy. If a trade buyer offers £5m where the open market value is £4m, the trade sale delivers approximately £3.80m to £3.95m net, more than the EOT.
Certainty and deliverability
EOT is highly deliverable when the business generates reliable post-tax cash. The buyer (the trust) is set up specifically to complete the deal. There is no buyer hunt, no competitive auction, and limited due diligence risk.
Trade sales are less certain. Approaches to 15 to 30 buyers may yield 3 to 5 indicative offers and 1 to 2 to completion. Due diligence can derail deals at any stage. Average completion rate from process start is 50 to 70%.
Timetable
EOT typically completes 6 to 9 months from instruction, including the independent valuation, tax clearance, legal drafting, and funding arrangement. The timetable is largely controlled by the seller and trustees.
Trade sale typically completes 12 to 18 months from preparation start, including value-uplift work, information pack, buyer outreach, offers, due diligence, and completion. The timetable depends on the buyer.
Cultural and legacy considerations
EOT preserves the business as an independent entity with employees as ultimate beneficiaries. Brand, location, team, and culture continue. Owners with strong loyalty to staff and locality often value this over the cash differential.
Trade sale typically integrates the business into a larger group. Some roles and locations may be consolidated. The brand may continue or disappear. The cash and certainty trade off against legacy.
Owner role after completion
EOT often allows the owner to step back gradually over 6 to 24 months while remaining a non-executive consultant. The deferred consideration provides a continuing income tied to business performance.
Trade sales typically require the owner to stay 6 to 18 months as part of the integration, often with specific deliverables tied to earn-out. Some owners welcome this; others find it constraining after independence.
Which suits your situation
EOT typically wins for owners who: want certainty over absolute headline price, value preserving the business and team, are comfortable with deferred consideration, and have a business generating reliable post-tax cash.
Trade sale typically wins for owners who: have a business with clear strategic value to a consolidator, want maximum upfront cash, can absorb the risk and effort of a competitive process, and are comfortable with the legacy outcome.
A useful tiebreaker: run both processes in parallel for the first 4 to 6 weeks. The EOT valuation will give you a defensible floor; the early trade approaches will tell you whether a strategic premium exists. Decide between the two with real numbers, not theoretical ones.
Key takeaways
- EOT delivers ~88% net of gain; trade delivers 76 to 80% net of gain.
- Trade can still win when a strategic premium exists.
- EOT is faster, more certain, and preserves the business.
- Run both processes briefly in parallel before committing.
Frequently asked questions
Which route gives more cash after tax?
Depends on whether a trade buyer pays a strategic premium. EOT delivers around 88% net of gain; trade typically delivers 76 to 80% net. EOT wins on equal price; trade wins when the buyer offers 10 to 30% above open market.
Which is faster?
EOT, typically 6 to 9 months from instruction. Trade sale 12 to 18 months from preparation start.
Which is more certain?
EOT, by a wide margin. The buyer is set up specifically to complete; deal failure is rare. Trade sale completion rate is 50 to 70%.
Can I do both?
Yes. Many owners run a 4 to 6 week parallel process: commission the EOT valuation and quietly approach 4 to 6 trade buyers under NDA. Decide between routes once both data points are in.
Does EOT really preserve the team and culture?
Yes, when funded sustainably. The trust holds the business indefinitely; there is no integration or restructuring. Cultural continuity is the central design intent.
Are EOT prices typically lower than trade prices?
Equal to open market value, which is typically 5 to 20% below a strategic trade price. The tax saving offsets some or all of the price gap, depending on circumstances.
Want a real number for your business?
Free, confidential indicative valuation from the BusinessValuation.co.uk team.