The EOT rules only apply to a person other than a company who disposes of ordinary share capital to an EOT, so usually individual or trust shareholders.
As with most beneficial tax rules or reliefs, a number of conditions must be met by a taxpayer to access the preferential tax treatment. The ability to sell shares to an EOT is no different, as there are a number of CGT qualifying conditions to be met:
Prior to the implementation of an EOT structure, it is highly recommended that advanced clearance is sought from HMRC. In addition, the trustees and directors will need to ensure they understand the qualifying conditions in order to avoid any post-transaction disqualifying events which could have serious tax consequences for both the vendors and the EOT itself.