EOT Valuations
EOT Valuation UK. Employee Ownership Trust Exit Planning
Independent valuations for UK SME owners considering an Employee Ownership Trust (EOT). HMRC-aligned. Reflects the post-26 November 2025 rules where 50% of the gain may qualify for relief, subject to conditions.
What Is an Employee Ownership Trust (EOT)?
An EOT allows business owners to sell a controlling interest in their company to a trust held for the benefit of employees. For disposals on or after 26 November 2025, the previous 100% Capital Gains Tax relief no longer applies in full: 50% of the gain is treated as chargeable for CGT purposes, with the remaining 50% potentially eligible for EOT relief, subject to qualifying conditions and the disqualifying period. It can still be a tax-efficient route compared with some other exit options, but it is no longer a fully CGT-free sale. Specialist tax and legal advice is essential.
- Partial CGT relief: for disposals on or after 26 November 2025, 50% of the gain may qualify for EOT relief, with 50% chargeable, subject to qualifying conditions
- Preserves business culture, jobs and continuity
- Employees can receive tax-free bonuses of up to £3,600/year
- Owners can retain a management role during transition
- HMRC-compliant process with independent valuation required
Why HMRC Requires an Independent EOT Valuation
HMRC requires that an EOT pays no more than market value for the shares it acquires. An independently obtained valuation supports the availability of EOT relief on the qualifying portion of the gain and provides evidence of fair dealing for all parties. Getting this right is critical, particularly under the tightened post-26 November 2025 rules.
“At BusinessValuation.co.uk, we prepare HMRC-aligned EOT valuations that stand up to scrutiny. Giving you, your employees and your advisers full confidence in the process.”
. Tony Vaughan, SME Valuation Adviser
Our EOT Valuation Process
A clear, five-step approach from first conversation to delivered report.
Free initial consultation
Discuss your business and objectives with Tony Vaughan. No obligation, no pressure.
Information gathering
We collect financial records, management accounts, and forecasts to build a complete picture.
Valuation analysis
Earnings-based and/or DCF methodology applied to arrive at a defensible market value.
Report delivery
A clear, HMRC-aligned valuation report you and your advisers can rely on.
Ongoing support
Guidance through the full EOT transition if required, from negotiation to completion.
EOT Valuation FAQ
Common questions from UK SME owners exploring an Employee Ownership Trust.
What is an EOT valuation?
An EOT (Employee Ownership Trust) valuation is an independent assessment of a business's market value carried out before the ownership is transferred to an employee trust. HMRC requires that the price paid by the EOT reflects fair market value.
Does an EOT still attract 0% CGT in 2026?
No. For disposals to an Employee Ownership Trust made on or after 26 November 2025, the previous 100% Capital Gains Tax relief no longer applies in full. Under the revised rules, where the qualifying EOT conditions are met and relief is claimed, 50% of the gain is treated as chargeable for CGT purposes. The remaining 50% may still benefit from EOT relief, subject to the statutory conditions being met and not breached during the relevant disqualifying period. The EOT route can still offer tax advantages compared with some other exit routes, but it is no longer a fully CGT-free sale for selling shareholders. The rules are technical and have also been tightened around areas such as trustee independence, control, valuation evidence and compliance. Sellers should take specialist tax and legal advice before proceeding with an EOT transaction.
How long does an EOT valuation take?
An initial EOT valuation can typically be completed within 2–4 weeks, depending on the complexity of the business and the availability of financial information.
Ready to Find Out What Your Business Is Worth?
Book a free, confidential consultation with Tony Vaughan. No obligation, no pressure.