What are the advantages of using an Employee Benefit Trust?
Using an EBT can offer several benefits, both from a tax and financing viewpoint. It is able to acquire shares in the company and hold on to them on a short or long term basis. It is able to borrow monies to acquire shares, for instance at a time when the owner wishes to retire. The shares can be left in the EBT for future allocation by way of various Inland Revenue approved employee share schemes. If properly structured it should be possible for contributions from the company to the EBT to be tax-deductible.
