C3.1915 CGT reliefs—employee-ownership trusts—overview

There are several tax measures which support employee ownership which include reliefs from income tax, capital gains tax and inheritance tax. This article and C3.1916 discuss the CGT reliefs.

For the income tax reliefs see E4.777A.

For the inheritance tax reliefs see I3.156A.

Substantial changes are included in Finance Act 2025 which amend the requirements for tax relief for employee ownership trusts (EOTs) and are effective for disposals made on or after 30 October 2024. These are set out in the policy paper 'Changes to the taxation of Employee Ownership Trusts and Employee Benefit Trusts' and are incorporated into the commentary below.

The capital gains tax relief provides that, if the qualifying criteria are met, disposals of ordinary shares in a company by a person other than a company to certain employee-ownership trusts (EOTs) will be deemed to be for a consideration which gives rise to no gain/no loss¹. Company is as defined in TCGA 1992, s 170(9)² (see D2.305), and ordinary shares capital is as defined in CTA 2010, s 1119 (see D2.108).

Although