Yes, what you’ve heard is correct – by selling to an EOT you qualify for two attractive, government-backed tax breaks. Firstly, the proceeds of the sale of shares to an EOT are exempt from capital gains tax. Secondly, when a company is owned by an EOT, it can pay annual bonuses of up to £3,600 to each employee free of income tax. There are a few tests and criteria you’ll need to meet to qualify for the tax breaks though, so get advice to make sure you comply. To compare the benefits of an EOT compared to other employee-ownership structures, read our employee ownership guide.