An employee benefit trust (or EBT) is a trust under which property (very often shares in the company which the employees work for, but sometimes also cash) is held on their behalf.
In the past, employee benefit trusts have been used as income tax avoidance devices. Legislation has now closed this down, but EBTs have an entirely legitimate role in companies which have an employee share scheme or employee ownership, in particular:
- The long term holding of a strategic block of shares on behalf of employees
- Buying shares from employees participating in an employee share scheme who wish to sell their shares (or have to because they are leaving their company)
If you would like to explore how employee ownership might be introduced in your company, please contact us for an initial discussion.
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