Comparison · Business · 2026
Employee Ownership Trust vs Share Option Scheme UK 2026
An Employee Ownership Trust transfers overall control of a business to all employees collectively, with a significant Capital Gains Tax incentive for the selling owner. A share option scheme like EMI rewards specific key employees with equity upside while the owner retains control. Here is how they compare for 2026.
TL;DR - 30-Second Summary
- - EOT: sell a controlling stake to a trust for all employees; 0% CGT possible for the seller if conditions are met
- - EMI/share options: reward specific key employees with future equity, owner retains control
- - Different goals: EOT is a succession/exit route; share options are a retention/incentive tool
Who Should Choose What?
Consider an EOT if...
- - You are planning a business exit or succession without a trade sale
- - You want a tax-efficient sale and to preserve the company's culture and independence
- - You want all employees, not just key staff, to benefit
Consider a share option scheme if...
- - You want to retain and incentivise specific senior hires
- - You are not looking to sell or transfer overall control
- - You want a lower-cost, more targeted equity incentive
Frequently Asked Questions
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Disclaimer: This is educational information, not tax or legal advice. EOT and share scheme rules have strict qualifying conditions — see gov.uk employee share schemes guidance and take specialist corporate tax advice before proceeding with either structure.
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