For years, the Employee Ownership Trust sat at the centre of the succession conversation. It looked clean, friendly and well aligned with the government’s wishes. The founder passed control to employees, the employees received collective ownership and the founder collected a tax-free exit.
The Autumn Budget changed that plot. The CGT relief fell from 100 per cent to 50 per cent. This was more than a technical adjustment. It altered the balance entirely. The founder now pays tax but still surrenders control, still accepts rigid equality rules and still places the business inside a structure that can block future decisions.
The Mural Crown Equity Exchange Vehicle now replaces the EOT as the more refined, more adaptable and more strategic succession tool. It works for founders. It works for advisers. It works for employees. Unlike the EOT, it does not confine the business to a single destiny.
The EEV gives families freedom. It is built for people who want their business to evolve rather than freeze.
A business often grows through several stages: creation, stabilisation, expansion, partial delegation, whole delegation and new leadership. An EOT expects the final step to arrive all at once. The founder hands over control, the trust owns a majority and the model settles into a fixed shape.
That rigidity once felt justified because of the 100 per cent CGT relief. Now that the incentive is half what it used to be, the rigidity feels far heavier. Advisers see this in their conversations. Founders who once accepted the EOT’s boundaries now hesitate. They want succession but they want options.
This is where the EEV changes everything. It behaves like a corporate transaction rather than a surrender. The founder exchanges shares into the EEV at market value and faces no personal CGT. After the 12-month holding period, the EEV can sell the trading business tax-free under Substantial Shareholder Exemption. The founder can give voting rights to employees in any configuration. They can do it gradually or immediately. They can pass majority control or minority control. None of these decisions place the company in permanent storage.
The EEV allows evolution. The EOT forces permanence.
The Autumn Budget exposed the EOT’s hidden rigidity
When the CGT relief dropped from 100 per cent to 50 per cent, advisers were quick to notice something many founders had overlooked: the EOT brings severe structural obligations. These obligations did not weaken when the relief was halved.
Under an EOT:
● The trust must own a controlling interest
● Employees must be treated as a single class
● Distributions follow equality rules
● The business becomes anchored inside the trust
● Unwinding the structure later is complex and costly
● Employees cannot be rewarded based on department, contribution or leadership unless through narrow exceptions
The founder now pays CGT on half the gain and still accepts these burdens. That equation makes far less sense today.
More importantly, the EOT can block the future sale of the entire business. The trust must hold a majority indefinitely unless an exit occurs under restricted conditions. It can trap the company inside a permanent employee-trust structure, making mergers, listings and strategic sales significantly harder.
A founder does not always want the business to be a cooperative forever. The next generation may want a different route. The EOT removes that choice.
The EEV conducts the transaction without harming future options
The Equity Exchange Vehicle functions as a flexible holding entity. The founder exchanges their shares into the EEV without paying personal CGT. The EEV becomes the corporate owner. From that moment, the family has a vast range of possibilities that the EOT simply cannot offer.
The EEV allows:
● Gradual handover of voting rights
● Immediate employee voting control if desired
● Different voting classes for various employee groups
● Time-based voting rights
● Performance-linked control
● Sector-based representation
● Hybrid boards where employees appoint directors
● Complete majority employee control, if that is the aim
And none of these adjustments creates personal CGT for the founder.
The EEV acts like a commercial platform, not a restrictive legal box. It respects ambition. It adapts to the company’s later chapters. If the employees eventually control the group and want to transform it into a cooperative-style operation, they can. If a future generation of founders wants to take the group private again, they can. If they're going to sell to a private equity fund or list on a stock exchange, nothing in the EEV stops them.
The EEV keeps the door open. The EOT closes it.
The EEV does not trap the business inside employee ownership
This is the sharpest distinction. Under an EOT, the dominant ownership remains with the trust and every decision is made in accordance with its duty to treat employees equally. The structure becomes a long-term vehicle for strategic corporate planning.
The EEV does not determine the business's destiny. It has no requirement to favour employees forever. It allows employees to take control if the founder wishes, but it does not impose it.
Most importantly:
The EEV does not prevent the business from being sold to non-employees.
This is a critical point. Under an EOT, the company is often unable to accept attractive acquisition offers because doing so would undermine the trust’s control or breach its duties.
Under an EEV:
● A private equity fund can acquire the group
● A strategic buyer can acquire specific subsidiaries
● The business can be partially sold and partially retained
● The group can be reorganised without breaching trust rules
● The entire group can be listed on an exchange
● Shares can move between employee hands and family hands across decades
This turns the EEV into something larger than a succession tool. It becomes the structure through which the business experiences multiple transitions across generations.
The SAFO provides the engine room behind the EEV
Once the founder has exchanged their shares into the EEV, the EEV sits inside the Mural Crown Self-Administered Family Office. This pairing builds a more powerful system.
Through the SAFO:
● Sale proceeds become corporate capital rather than personal wealth
● Investment into new trading subsidiaries preserves Business Property Relief
● Offshore companies can be held without pulling income into the founder’s personal tax return
● The family estate remains lean
● Freezer Shares create long-term income taxed at 14 to 24 per cent CGT
● Alphabet shares shape control across children
● Multiple EEVs can exist under one SAFO
● Family trusts, including an Employee Foundation, can distribute value with precision
This means employee control can grow while the family still retains the financial spine of the enterprise. Or employee control may recede as the business enters new markets. The SAFO does not fight these transitions. It supports them.
How an EEV can take a business further than an EOT ever could
An EOT assumes the business has reached maturity and the founder wants a clean exit. The EEV operates under a different worldview. It assumes the business will keep moving.
Consider the possibilities:
- Gradual transition to employee control
The EEV can push voting rights to employees year by year, letting each generation of staff earn influence rather than inherit it.
- Full majority employee control
If that is the founder’s aim, the EEV can give employees 60 per cent, 70 per cent or more. Nothing blocks this.
- Employee control today, family control tomorrow
If a future generation of employees struggles, the family can buy back voting shares. The EEV allows reversibility. The EOT does not.
- Cooperative-style structure at the choice of employees
Employees controlling the EEV can elect to convert the group into a cooperative model using the Employee Foundation as the anchor.
- Cooperative today, listed multinational tomorrow
If later generations want scale, outside capital or a public listing, the EEV allows that evolution. The EOT makes such evolution extremely difficult.
- Partial or complete sale to third parties
A strategic buyer may appear in ten years. The EEV can sell cleanly under SSE. The EOT cannot.
This is why advisers now view the EEV as the next stage in the development of employee-aligned succession models. It is not a rejection of employees. It is an upgrade in how employees are treated.
The EOT is no longer a leading option. Its relief has been cut and its rigidity remains untouched. It traps control. It restricts strategy. It limits the business's destiny.
The EEV sits in a different category. It respects employee involvement but refuses to confine the company to a single pathway. It allows employees to exercise voting control, either gradually or immediately, without personal CGT. It will enable cooperative principles without permanent obligations. It allows future sales, future listings, future reorganisations and multiple transitions across generations.
The EEV gives founders and employees something the EOT never could: freedom of design.
