The Role of Advisers in EOT Transactions: Why the Right Team Matters

Transitioning to Employee Ownership? Don’t Go It Alone.

Selling your business to an Employee Ownership Trust (EOT) can be one of the most rewarding — and tax-efficient — ways to exit. But make no mistake: an EOT transaction is not a DIY project.

From legal structuring and valuation to employee communication and trustee appointments, the process is complex, sensitive, and highly technical. Getting the right outcome — for you, your business, and your employees — depends on working with experienced, independent advisers who understand how to navigate every stage of the journey.

Why Adviser Support Is Essential

EOTs are unlike traditional business sales. There’s no external buyer to negotiate with, but that doesn’t make it simple. In fact, the lack of a “third-party” buyer means the deal must stand up to external scrutiny — especially from HMRC.

Specialist advisers play four critical roles:

1. Valuation Guidance

While an EOT is not about driving the highest possible price, the sale must still take place at fair market value. HMRC expects a credible, defensible valuation that reflects what a third-party buyer might pay. An independent valuation adviser will:

• Analyse maintainable earnings

• Benchmark sector multiples

• Apply relevant discounts or premiums

• Ensure HMRC standards are met

This ensures no tax exposure for you — and confidence for employees.

2. Legal and Structural Setup

EOTs require a very specific legal framework, including:

• Drafting and executing the EOT deed

• Amending the articles of association

• Creating share purchase agreements

• Ensuring tax compliance (e.g. zero CGT relief under CTA 2003)

Specialist solicitors are needed — ideally those with EOT-specific experience, not just general corporate law knowledge.

3. Trustee and Governance Advice

Choosing and training your initial EOT trustees is a vital part of the process. Trustees represent the employees, hold the company shares, and must act in the best interests of the business. Advisers help with:

• Trustee selection criteria

• Drafting the trust governance framework

• Explaining fiduciary duties

• Supporting initial trustee onboarding

The goal is to create balanced, effective governance that protects the business and supports leadership.

4. Communication and Employee Engagement

Employee ownership is about more than structure — it’s about culture. A good adviser will help you:

• Develop a clear communications strategy

• Frame the transition in positive, motivating terms

• Provide FAQs and briefing packs

• Support town halls or Q&A sessions

• Create a roadmap for long-term employee engagement

Why? Because ownership without understanding leads to confusion, not motivation.

Choosing the Right Advisers for Your EOT

An effective EOT adviser team usually includes:

• An EOT lead adviser (often the project manager and commercial guide)

• An independent business valuer

• A specialist legal firm with EOT experience

• A trustee governance adviser

• A tax specialist, if needed

At EOT.co.uk, we act as lead commercial advisers — helping you assess feasibility, shape the right structure, and bring together the right experts to deliver the transaction smoothly.

Why Independence Matters

Many firms offer "EOT in a box" solutions — fast, low-cost, templated services. But shortcuts can lead to problems:

• Overstated valuations

• Poor trustee structures

• Inadequate governance

• Missed tax protections

• Employee confusion

That’s why we always recommend independent, conflict-free advisers — each selected for their specialist expertise.

You Only Do This Once — Do It Right

Selling to an EOT is a once-in-a-lifetime event. It preserves your legacy, rewards your team, and protects the future of your business. But it only works when it’s done well — and that means getting the right people in your corner from day one.

Considering an Employee Ownership Trust for your business? We offer independent, practical guidance from feasibility to completion. Start with a confidential conversation today.