Budget Update: What the New CGT Rules Mean for Employee Ownership
The Budget has changed the Capital Gains Tax relief on Employee Ownership Trusts. The core question now is what this means for owners, advisers and succession planning in Northern Ireland.
The relief on qualifying sales to Employee Ownership Trusts has moved from 100% to 50% and applies immediately. That change caught many owners and advisers off guard, but it also confirmed something important – government has chosen to keep the EOT model in place as a recognised succession route.
What has actually changed?
You now pay Capital Gains Tax on half of the gain. The other half is treated as neither a gain nor a loss. Most owners will face an effective rate of around 12%.
That still compares favourably with other options:
- lower than the 14% Business Asset Disposal Relief rate on the first £1m of gain
- lower than the planned increase of BADR to 18% in April 2026
- substantially lower than the 24% rate where no relief applies
A new way to see the numbers clearly
You can now use Employee Ownership Ireland’s CGT comparison calculator to see what this change could mean in practice. It helps you compare a standard sale and an EOT sale under the new rules, so you can move from headline percentages to real, deal-based figures.
If you are talking to advisers, considering options with a co-owner, or testing scenarios for your own succession, this tool gives you a clearer starting point for those conversations.
Why the model still works
You might assume the change weakens EOTs. The reality is more nuanced. Many business owners were not aware of the 100% relief before the Budget. A lot of advisers were only starting to get to grips with it. For many, the news was not that the relief is reducing – it was that any relief exists at all.
The relief still achieves its core aims:
- raising awareness of employee ownership among advisers and owners
- narrowing the difference in value between an EOT sale and a trade sale
- removing barriers that stop succession plans moving forward
The wider benefits remain unchanged
EOTs were never only about tax. Owners and employees repeatedly point to wider benefits that shape how the business feels and performs:
- stronger employee voice
- deeper commitment to the organisation
- improved retention
- smoother leadership transitions
- clearer long-term focus
- better alignment between people, purpose and performance
None of these depend on a particular CGT rate. They come from the ownership structure, the culture it supports and the way decisions are made.
Trade sales still carry the same risks
The Budget has not changed the realities of a traditional sale. Many deals still:
- fall through late
- see buyers change terms with little warning
- shift decision-making outside Northern Ireland
- put jobs and culture under pressure
- leave owners unsure about the future of their legacy
An EOT avoids these issues. It keeps decisions closer to the people who built the business. It supports continuity and still comes with a meaningful tax advantage.
Our ambition remains the same. We want to see employee ownership grow across Northern Ireland. Our target of 10,000 employee owners by 2030 still stands and continues to guide our work.
More support for owners and advisers
Demand for practical, independent guidance is increasing. Employee Ownership Ireland is expanding the support available so that owners and advisers can move forward with confidence. This includes:
- updated guidance and practical resources
- an improved members’ area
- easier access to independent experts
- more peer-to-peer learning and networking
This support will continue to grow over the months ahead as needs evolve.
Ready to explore your options?
If you are weighing up your next step, there are two simple ways to move from theory to action.
1. See the numbers for your deal
Use the CGT comparison calculator to test different scenarios and see how an EOT sale compares with a standard sale under the new rules.
Try the CGT Comparison Calculator2. Apply for a fully funded feasibility study
Access independent legal, financial and structural advice through a fully funded feasibility study provided via the Department for the Economy, with no obligation to proceed.
Apply for a feasibility studyFor many owners, the EOT route remains one of the most reliable ways to secure the future of their business and protect the people who helped build it. How will you use these tools to shape your next decision?
