Last week, the final details of a tax incentive to encourage business owners to sell to their employees through the new Employee Ownership Trust were released. Sellers who sell a majority of their companies will be entitled to up to 10M in tax-free capital gains.
This approach follows the US and UK, who have seen massive increases in employee ownership following the introduction of tax incentives. In both countries, as in Canada, these incentives are intended to balance the additional cost, risk and complexity of selling to workers. MORE
ESOPs-in-CANADA
An Employee Share Ownership Plan (ESOP) allows employees, who qualify, to purchase shares in their
employer’s company, with or without monetary assistance from the company.
Employees can acquire shares and ownership through an ESOP that can range from one percent to 100
percent.
The key aspect is that employees have an ownership stake in the company they work for and share in the
risks and rewards that accrue to it.