The main attractions for a selling shareholder is the zero per cent rate of CGT that will apply to a qualifying sale, and the hope and expectation that the company brand, behaviours and cultures they have helped to build over a period of time will be retained. Other key points include:

• A controlling interest in the company or group is sold to the EOT under a share purchase agreement. The EOT ownership must be over 50 per cent, and therefore not all shareholders are required to sell.
• At least part (and often most) of the sale consideration payable for the shares will usually be paid over a substantial period of time, out of the future profits the trading group realises. This is often one of the main drawbacks for prospective vendors when comparing other exit options, such as a trade sale.
• The sale price for the shares can go at full market value, or it's possible for the vendor to sell at 'undervalue' with no adverse CGT or inheritance tax implications.
• The vendor shareholders can still remain as employees or directors of the group, post-sale.
• The vendor shareholder, or main vendor shareholder if there are numerous sellers, will commonly be one of the trustees of the EOT (or a director of any trustee company).
• Any minority shareholding retained will not attract the zero per cent CGT rate if this was to be subsequently sold to the EOT.