Sell to your employees or to a buyer?
A bigger price isn't always the better deal. Since 26 November 2025, half your profit on a sale to an employee ownership trust (EOT) is free of tax, but the trust usually pays over years. We compare what you'd keep from each offer, in today's money.
Your answer
Enter the two offers to see which one leaves you with more.
About this calculator
For the owner of a company who has an offer from an outside buyer and wants to compare it with selling to the staff through an employee ownership trust. The two routes are taxed differently and pay out differently, so the bigger headline price isn't always the better deal.
It shows the tax on each route, the cash you'd end up with, and what each is worth in today's money after allowing for the wait and the chance of not being paid. You type in the offers and your own figures; we don't read your accounts or tax record. It assumes you sell all your shares and are the only owner, and it uses the 2026/27 tax rates.
It compares the money only. Whether the company and the sale meet the conditions for the trust relief (control, all staff benefiting, independent trustees, a fair price) is for a lawyer to confirm. It isn't a valuation.
What happens to your answers
We don’t keep them. Your answers go to our server to do the sums and aren’t stored or logged. If you copy a link to your answers, they’re in the link itself, so only share it with people you trust.
How it’s worked out
First we take each price, less your selling costs and what the shares cost you, to find your profit. On a sale to the trust, half that profit is free of tax and the other half is taxed at the normal rates: the law doesn't allow the lower business-sale rate on this route. On a sale to a buyer, all the profit is taxed, but if you qualify the first part, up to the £1 million lifetime limit you have left, is taxed at the lower rate of 18%.
Your £3,000 tax-free amount comes off first, unless you've used it this tax year. Then the profit is taxed at 18% as far as it fits under the basic-rate limit with your other income, and at 24% above that. We take the tax as paid on the day.
Then we cut back the payments that arrive later for the years you wait, at your own yearly return, and for the chance you're never paid. In the example the trust pays £2,000,000, 30% on the day and the rest over 5 years, and the buyer £2,400,000, 70% on the day and the rest over 2 years. After tax, costs and the wait, the buyer leaves you about £336,240 more in today's money.
Worked example
Selling to the buyer leaves you about £336,240 better off, in today's money, than selling to your employees.
2026/27 rates · you sell all your shares and are the only owner · lower business-sale rate on the buyer route · tax-free amount available · later payments in equal yearly amounts · 5% a year for waiting · tax paid on the day · tax on unpaid later payments not claimed back
| Tax-free amount for the year | £3,000 |
|---|---|
| Room left at the basic rate after your other income | £37,700 |
| Trust: the price | £2,000,000 |
| Trust: less your selling costs | − £40,000 |
| Trust: less what the shares cost you | − £100 |
| Trust: your profit | £1,959,900 |
| Trust: less the 50% of the profit that isn't taxed | − £979,950 |
| Trust: profit that is taxed (no lower business-sale rate on this route) | £979,950 |
| Trust: less your tax-free amount | − £3,000 |
| Trust: taxed at 18% | £37,700 |
| Trust: taxed at 24% | £939,250 |
| Trust: tax on the sale | £232,206 |
| Trust: paid on the day | £600,000 |
| Trust: paid later (£1,400,000), worth this today after the wait | + £1,212,253.47 |
| Trust: less the 10% chance you never get it | − £121,225.35 |
| Trust: less your selling costs | − £40,000 |
| Trust: less the tax | − £232,206 |
| Trust: what you keep in today's money | £1,418,822.12 |
| Buyer: the price | £2,400,000 |
| Buyer: less your selling costs | − £60,000 |
| Buyer: less what the shares cost you | − £100 |
| Buyer: your profit | £2,339,900 |
| Buyer: less your tax-free amount | − £3,000 |
| Buyer: taxed at the lower business-sale rate of 18% | £1,000,000 |
| Buyer: taxed at 24% | £1,336,900 |
| Buyer: tax on the sale | £500,856 |
| Buyer: paid on the day | £1,680,000 |
| Buyer: paid later (£720,000), worth this today after the wait | + £669,387.76 |
| Buyer: less the 5% chance you never get it | − £33,469.39 |
| Buyer: less your selling costs | − £60,000 |
| Buyer: less the tax | − £500,856 |
| Buyer: what you keep in today's money | £1,755,062.37 |
| Tax on later payments that never arrive: we assume it isn't claimed back, so the tax shown stays the same | Assumed |
| How much more you keep with the buyer, in today's money | £336,240.25 |
Worked out using HMRC's Capital Gains Tax rates for the 2026/27 tax year and the employee-ownership trust relief for sales from 26 November 2025 (Taxation of Chargeable Gains Act 1992, section 236H). Later payments are cut back for waiting, at the yearly return you chose, and for the chance they never arrive. Not legal or tax advice, and not a valuation.
Questions people ask
Why isn't the bigger price always the better deal?
Tax and timing change what you keep. Half the profit on a sale to an employee ownership trust is free of tax, so a lower price can leave you with more. But the trust usually pays over years, and money you wait for is worth less than money in your hand.
What if a later payment never arrives?
You pay tax on the whole price when you sell, even the part paid later. If a fixed later payment is never paid, you can usually claim that tax back. Payments that depend on how the business does later are taxed differently. Our figures assume the tax isn't claimed back, so they're on the cautious side.
Does this tell me which one to choose?
No. It compares the money only. Selling to a trust also changes who owns the business and what happens to your staff, and it has legal conditions a lawyer must check. Use the answer to start the conversation with us, not to end it.
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