Corporate Law Archives

Dissolving a company? How to avoid being left pink faced

Posted on 2 January 202519 March 2025 by Sarah O'Sullivan

Pink Floyd guitarist David Gilmour recently hit the headlines for not being able to sell a £10 million seafront mansion (‘The Property’) because it turns out that he doesn’t actually own it.

In short, Gilmour did not purchase the Property himself; instead, he purchased it in 2011 through his former company, Hoveco Limited. Then, in 2014, Hoveco was dissolved, and a subsequent administrative error meant that the Property was not transferred into Gilmour’s ownership and, as a result, has drawn attention to the phenomenon known as ‘bona vacantia’ (ownerless goods).

This article will explore the voluntary strike off procedure that can be used to dissolve a company before explaining what happens when company property is not identified and transferred prior to a company’s dissolution.

The voluntary strike off procedure

The voluntary strike off procedure allows for companies to be dissolved voluntarily and to cease to exist as legal entities. Various scenarios can lead to a voluntary strike off including company reorganisations, business and asset transfers and scenarios where a company was set up for a purpose that is no longer needed. Once struck off, the company will be dissolved and will cease to be a legal entity.

The directors (or a majority of them) make the application to strike off a company on the company’s behalf. They are then obligated to notify the members, any directors who did not make the application, creditors or prospective creditors and employees of the application.

It should be noted that an application to strike a company cannot be made if in the previous three months, the company has carried out certain activities, including changing its name, trading, disposing of property or rights for value or engaging in activities other than ones necessary for making the striking off application. An application also cannot be made where a company is subject to certain insolvency proceedings, so seeking legal advice before proceeding with a dissolution is essential.

Property of a dissolved company

Once dissolved, the company no longer exists as a legal entity, and therefore, it can no longer own property. This means that any property owned by the dissolved company will pass to the Crown (or the Duchies of Lancaster or Cornwall) and become bona vacantia. Nearly all types of property can become bona vacantia, including:

land and interests in land;
cash, including bank accounts and insurance policies;
intellectual property; and
the benefit of assets, agreements and mortgages.

There are two situations where the property owned by a dissolved company cannot become bona vacant. The first is where the dissolved company owns property on trust for third parties. The second is where the dissolved company owns property overseas, as this property will likely be subject to the law of the jurisdiction of where it is located. As a result, it may be necessary to restore the company so that the property can be disposed of in accordance with the relevant local law.

The Crown (acting through the Treasury Solicitor) can disclaim their title to bona vacantia if the Crown decides not to keep or sell the property. Similarly, if there is a risk or liability associated with ownership of the property (such as a tenancy of a commercial lease, contaminated land, property subject to security or to competing claims). Where the disclaimed property is freehold land, the freehold title to that property will be extinguished.

The property will then escheat (revert) to the Crown Estate (the statutory corporation that administers the monarch’s land) so that freehold land is never without an owner. The Crown Estate cannot take any action that would be construed as management, possession or ownership of the property, as to do so could render the Crown Estate responsible any liabilities arising from the property.

There are several situations where company property may become bona vacantia, for example, when Hoveco was dissolved, an inadvertent oversight meant that the Property was not disposed of and therefore became bona vacantia. Other scenarios include liquidators failing to dispose of assets that were not known about or disclaiming onerous property (such as unprofitable contracts or unsellable property) under the Insolvency Act.

Recovering bona vacantia

There are several ways to recover bona vacantia:

Restoration of a dissolved company

Under the Companies Act, a restored company is treated as never having been dissolved, hence any property that had become bona vacantia on the dissolution of the company will automatically revert to the company’s ownership.

However, this may not be possible where the Crown has sold the property. In these cases, the Crown will pay the company the amount of any consideration it received from the disposal of the property or an amount equal to the value of the property if no consideration was received.

The court also has the power to restore the company to the position it would have been in had the company not been dissolved.

Vesting orders

This is the approach that Gilmour is understood to have adopted in relation to the Property. Parties can apply for a vesting order under one of:

the Companies Act in relation to property disclaimed by the Crown.

Applications made under the Companies Act can only be made by parties who can claim an interest in the property such as creditors, tenants and parties who had paid to purchase the property.

the Insolvency Act in relation to property disclaimed by a liquidator;

Applications made under the Insolvency Act must be made within three months orf earlier of the applicant becoming aware of the disclaimer or of the applicant receiving a copy of the liquidator’s disclaimer.

the Law of Property Act 1925 in relation to escheat property;

Under the Law of Property Act, the court can order the creation of a corresponding freehold title to the one that was extinguished through escheat. This requires the applicant to have held a legal right to the property. There is no time limit on an application under the Law of Property Act.

the Trustee Act 1925 in relation to property held by a corporate trustee.

Where property becomes bona vacantia following the dissolution of a corporate trustee, the court can vest the dissolved trustee’s interest in a new trustee. Alternatively, in the case of joint trustees, the court also has the power to vest the dissolved trustee’s interest in the joint trustee.

Discretionary grants

Where a company was solvent on its dissolution and where it would be impossible or cost-prohibitive to restore a company, the Crown can exercise its discretion to make payments to former shareholders as owners of the company. It is important to note that a director cannot make any application for a discretionary grant unless they are a shareholder as well. Conversely, where the company was insolvent, this discretion extends to the liquidators and administrators of the dissolved company.

This power is limited to the payment of cash received by the Crown from the disposal of bona vacantia and the grant is subject to a maximum limit of £3000 and, where it would be possible to restore a company, the applicant will be forced to undertake to not restore the company in the future.

Purchasing Escheat

The Crown Estate has greater powers over the land acquired through escheat and is not subject to a deadline to sell the freehold land. However, as the Crown Estate cannot undertake acts of management, it can only sell the whole of the property. Assuming that the purchaser is an “appropriate person or body” and that the sale is in the public interest, the Crown Estate will sell with a view to its legal requirement to obtain the best consideration for the property. Any transaction will also require the purchaser to make a contribution to the Crown Estate’s legal fees.

Purchasing from the Crown

The Crown has three years to disclaim their title to any bona vacantia. This period runs from either the date that the Crown was notified of the bona vacantia or from the date that the Crown established the ownership of the property. Should the Crown decide not to disclaim their title, they will seek to sell the property for full market value within these three years.

As such, there are numerous considerations that business owners and directors should be aware of when dissolving a company. Identifying and correctly disposing of a company’s assets can prevent business owners from the expense, complexity and delays of dealing with bona vacantia.

The multidisciplinary approach adopted by Tees’ Corporate & Commercial, Litigation and Commercial Property teams means we are always ready to assist both with the dissolution of a company or with retrieving bona vacantia.

Essential tips to prepare your business for sale: A seller’s guide

Posted on 19 December 202427 March 2025 by Sarah O'Sullivan

Selling a business can be complex, and often, business owners do not know how to prepare. Early preparation can be key to enabling a business sale to run smoothly. In particular, it can greatly assist the due diligence process.

Valuation

One of the first things prospective sellers should do is approach a specialist business valuer. A good idea of the company’s (‘Target’) value will assist in early negotiations regarding the sale price with the buyer. It may influence key aspects of the deal, such as whether deferred consideration is necessary from the buyer’s perspective. A business valuer will assist in ensuring that the price is realistic given the market conditions, and they will also help you to understand the risks associated with different valuations.

Tax

It is essential that sellers are informed on the tax position of the Target, as well as their own personal tax position. Certain tax reliefs may be available on the sale, such as Business Asset Disposal Relief (if the seller is an individual) or Substantial Shareholding Exemption (if the seller is a company). A tax specialist will explain how the tax will work on completion and whether any reliefs may be available to you.

Corporate Documents

In Tees’s experience, it is common for sellers not to have or not know where Target’s corporate documents are. It will be of significant benefit to the efficiency of the sale if these are obtained before the transaction gets started; the buyer’s solicitor will almost certainly request these documents as part of the due diligence process, and not having the papers can create a bad impression as to how the Target has been operated. Key documents that the buyer will likely request are:

The Target’s statutory registers including:
- Register of Members: this is essential as it shows who the legal owners of the shares are (until the shareholders are placed on the register of members, they are not legal owners of the shares and will not have legal title to sell them to the buyer).
- Register of Persons with Significant Control
- Register of Directors and their addresses
- Register of Secretaries and their addresses
- Register of Allotments
- Registers of Transfers
The Target’s minute books and key shareholder resolutions
Certificate of Incorporation
Articles of Association
Memorandum of Association
Records of any changes to the Target’s name
Evidence that any charges or debentures have been released
The corporate structure of the Target, including the shareholdings, and whether there are any holding companies or subsidiaries.
Copies of any existing Shareholders’ Agreement

Companies should have records of at least some of the above, and collating these early in the sale process will help the buyer’s due diligence get off to a good start. In addition, sellers should review Companies House and ensure all filings are current. If they are not, the seller is technically in breach of its statutory obligations, and the buyer will ask for this to be rectified before completion.

Employment Issues

Another aspect that sellers can prepare early is an anonymised list of all employees in the business, their date of birth, job roles, salary, benefits (including details of any pension scheme), and whether there are or have been any employee disputes or grievances. The buyer will ideally want copies of all employment contracts or a template employment contract if these are the same for all employees.

It would also be useful for the buyer to know whether any employees do not plan to continue working for the Target, and any implications this will have on running the Target post-completion.

Commercial Contracts

We often find sellers do not have records of their key contracts with suppliers and customers. Often, in due diligence, buyers ask for copies of agreements with Target’s top 10 suppliers and top 10 customers. Preferably, the Target will have written agreements with these companies to outline how the relationships work practically and help to minimise the risk of disputes.

A review of the contracts that the Target has in place would be a useful exercise for a corporate seller. If there is no written contract, we would advise getting one in place. All contracts should be collated to provide these to the buyer quickly.

Litigation

The buyer will inevitably need to know about any litigation that is taking place and what stage it is at. They will request copies of any agreements reached or offers made, as well as copies of all correspondence with the other party or their advisor. Sellers must give an honest account of any ongoing disputes.

The buyer will want to consider its potential liability surrounding any dispute. Sellers may be able to consider settlement with the disputing party. Buyers may want to put indemnities in place to cover any related claims post- completion.

Property

Sellers should review the Target’s property portfolio and collate all documentation relating to any properties owned or leased, as well as any licences, permits or other rights relating to the properties. Often sellers do not have these documents to hand, which can slow down the due diligence process, as it can take time to retrieve property documents from the Land Registry, Councils or other authorities.

Intellectual Property (IP)

Similarly, IP is another asset that may be included in the sale, and the buyer will want to know about all trademarks, patents, and design rights. It is good practice for a seller to organise this information into a schedule, including all registration numbers, renewal dates and the IP owner. If the owner is another company within Target’s group, the ownership of the IP may need to move to Target. It is advisable that the seller take tax advice at this event.

Summary

Early preparation for a sale can be key to its efficiency. Sellers should have early conversations about tax and valuations to assist with early negotiations with potential buyers. Sellers should also collate as much information and documentation about the Target as possible before the due diligence process, as otherwise, there can be a lot of back-and-forth with the buyer submitting additional requests for information, which can delay completion.

If you are a potential seller considering a sale of your business, don’t hesitate to get in touch with our Corporate and Commercial team to discuss how you can prepare and how we may assist you with your transaction.

The Budget: Pains or gains for businesses?

Posted on 14 December 202419 March 2025 by Sarah O'Sullivan

On 30 October 2024, the Chancellor, Rachel Reeves, delivered the Autumn Budget (‘the Budget’). This outlined the Government’s intention to increase spending on public services by an estimated £70 billion, with more than 50% of this investment being funded through taxation. This has created a degree of uncertainty for small business owners across the UK, who may now wonder how their plans for their business will be affected.

In this insight, we will discuss the implications of several headline tax reforms for business owners, focusing on Capital Gains Tax (‘CGT’), Business Asset Disposal Relief (‘BADR’) and Investors’ Relief.

It should also be noted that the Budget included the Corporate Tax Roadmap, which promised to maintain the current 25% cap on the main rate of Corporation Tax while also retaining the small profits rate of 19%. Marginal relief will also be preserved alongside Research and Development reliefs and the capital allowances system.

CGT: What is it and what has changed?

CGT is a tax payable by the individuals on the gain (profit) made on the sale or disposal of various types of property (including shares and other business assets, but excluding your primary residence) and is charged at two rates:

a standard rate which is payable by basic rate taxpayers and
a higher rate payable by higher and additional rate taxpayers.

The Budget raised the rates at which CGT is charged to 18% for the basic rate and to 24% for the higher rate. These increases came into effect immediately from 30 October 2024.

Individuals have an annual CGT allowance of £3,000, on which CGT is not charged. It is important to remember that this allowance cannot be carried forward, so careful planning is advisable to ensure that it is used effectively and efficiently.

BADR: What is it, and what has changed?

BADR is a relief from CGT available on a lifetime allowance of £1 million of qualifying business assets. BADR is available to individuals on the disposal of:

their shares in their own company (providing they own a minimum of 5% of the share capital and voting rights for a minimum of 2 years prior to the disposal);
their interest and assets in a partnership or
in the case of a sole trader, their assets.

Currently CGT on the lifetime allowance of £1 million is charged at 10%. However, from 6 April 2025, the rate at which CGT is charged on the allowance will rise to 14% and then from 6 April 2026, this rate will rise to 18%.

Investors’ Relief: What is it and what has changed?

Investors’ Relief is designed to provide CGT relief to individual investors on qualifying investments, which include ordinary shares in an unlisted trading company. It should be noted that the shareholder will not qualify for the relief if they are a paid director or employee of the company at any point while owning the shares. There are only limited circumstances when the individual seeking relief can receive payments from the company.

Like BADR, Investors’ Relief is subject to a lifetime allowance. From 30 October 2024, the lifetime allowance was cut from £10 million to £1 million. The rate at which CGT is charged on the relief will also rise, in line with BADR, to 14% from 6 April 2025 to 18% from 6 April 2026. These rises will mean that the base rate of CGT will apply to both lifetime allowances of BADR and Investors’ Relief.

Considerations for Business Owners

Business owners will be conscious that these increases to CGT and the reduction in BADR will have an impact on any future sales. Business owners considering selling their business as part of their exit strategy may wish to review their plans, especially the timing of any sale.

The increased tax liabilities of the trading company (for example, the increase in NI contributions, which could affect the profitability of certain companies), as well as the additional tax that will be incurred on the sale of the company, will also impact the valuation of the business.

Whilst more traditional exit strategies could involve a sale to a third party or a management buyout (‘MBO’), business owners may also look to alternative ownership structures, such as a sale to an Employee Ownership Trust (‘EOT’) for a more tax-efficient disposal. CGT rates on a sale to an EOT are 0%; therefore, these increases in CGT rates might mean that EOTs are more attractive than traditional exit strategies. Such generous tax relief, while attractive, is not the only consideration when considering an EOT, and it will be important for business owners to consider the following:

the future profitability of their company, since the purchase price tends to be funded from future company profits over an extended period (five to 10 years);
whether the employees are ready for the transition, to ensure the company can sustain or grow its profitability;
whether the business owner is ready to hand over control of their business to the EOT. While a selling shareholder may continue to work in the business and sit on the board of the EOT and the company, they will not be able to form a majority on the board of the EOT, and the EOT will ultimately control their company.

As always, we recommend seeking specialist tax advice before selling a business to ensure that any deal is structured in a tax-efficient manner and that the transaction will receive the appropriate tax treatment from HMRC.

If you are considering your options for succession planning, our corporate team has extensive experience advising on all aspects of business succession planning, from sales to third parties, MBOs, and EOTs.

Employee ownership trusts: Tax-free succession explained

Posted on 13 December 202419 March 2025 by Sarah O'Sullivan

Introduced in an effort to promote employee ownership of businesses, Employee Ownership Trusts (EOTs) allow business owners to sell their shares to an employee-owned trust free from CGT and grant tax relief on bonuses of up to £3,600.

Indeed, even before the increases to CGT in the Autumn 2024 Budget, EOTs had become an ever more popular option for business owners looking to part with the ownership of their companies. EOTs are suitable for various companies and have been adopted by major retailers such as John Lewis and numerous small and medium-sized enterprises.

What are EOTs?

An EOT is a collective vehicle that purchases a controlling interest in a company and holds it on behalf of the employees. It is a type of employee benefit trust that attracts generous tax reliefs. It was introduced 10 years ago by the Finance Act 2014.

They are different from an employee share scheme, which is an arrangement whereby a small percentage of a company’s shares are reserved for its employees, who will, either immediately or at some time in the future, hold shares alongside other shareholders (usually the founder and/or outside investors) who together own most of the company.

What do EOTs involve?

The creation of a trust for the benefit of employees
which purchases shares in a trading company…
so that it holds a controlling interest in the trading company (at least greater than 50% of the ordinary shares and voting rights).
This enables a Capital Gains Tax (CGT) free disposal for selling shareholders where the shares are sold in the same tax year in which the EOT obtains control, and then
enables payment of up to £3,600 income tax free annual bonuses for qualifying employees of the trading company, which can now exclude directors.

EOTs operate:

through a corporate trustee, which holds the shares in accordance with a detailed trust deed on behalf of the employees of the trading company;
by receiving funds from the company, as and when they are available, to fund the purchase of the shares. Some consideration is usually paid on completion of the sale and the remainder deferred and paid over time, anything up to 10 years;
with a mix of executive directors of the trading company, employee representatives,Sellers and an independent professional trustee; and
on a business-as-usual basis for the trading company, but with the benefit of greater employee engagement.

EOT tax reliefs

One of the attractions of an EOT is the tax reliefs. In particular:

An individual who disposes of shares to an EOT may be eligible for relief from CGT, making any gain exempt from CGT. This also benefits minority shareholders who might not have the benefit of Business Asset Disposal Relief (formerly Entrepreneurs’ Relief); and
a company that is owned by an EOT can pay up to £3,600 each year in tax-free bonuses to its employees (this does not prevent higher bonuses being paid, just the additional party will be subject to income tax in the normal way.

There are reliefs from inheritance tax so that certain dispositions made to an EOT are not chargeable transfers of value, although selling shareholders should note that where the purchase price is to be paid in instalments and an individual who has sold their shares dies before having been paid in full, the value of any unpaid instalments will be treated as part of their estate for inheritance tax purposes. Shareholders with critical illness or older in years should discuss these implications with their tax adviser.

The EOT CGT relief is more generous than the CGT reliefs that are available for disposals to standard Employee Benefit Trusts but are also more restrictive, making it important to take advice to avoid some of the pitfalls that can wipe away these benefits.

Conditions for achieving tax reliefs

Certain conditions must be met to secure the CGT relief for the sellers and exemption from income tax on bonus payments made by the trading company to its employees.

Conditions common to these reliefs are:

The all-employee benefit requirement (although directors can now be excluded from the annual bonus).
The equality requirement (which requires that distributions must be for the benefit of all employees of a company on the same terms).
The controlling interest requirement (holding more than 50% of the ordinary share capital, voting rights and entitled to more than 50% of the profits and assets on a winding up).
The trading requirement; and
the participation requirement – the ratio between excluded participators (people who are both 5%+ shareholders and directors/company secretary or employees, including for this purpose any employees who are their relatives) and employees must not be more than 2/5 (i.e. 40%) (this is to prevent the relief being claimed in companies where there are only a few non-shareholder employees).

In addition, for CGT relief to be available, the participator or any person connected with them must not have claimed the same CGT relief in any earlier year in relation to the disposal of shares in the same company or any member of the same group.

A properly established EOT will ensure these conditions are met and, so far as possible, include controls to prevent a disqualifying event.

Disqualifying events

If any of the conditions are breached during the first four tax years after the end of the tax year in which the sale takes place (increased from the first tax year by the Autumn Budget 2024), the CGT relief can be clawed back from the Sellers resulting in CGT becoming due on the gain that occurred at the time of the disposal. Other disqualifying events will also be introduced by the Finance Bill 2024-25, taking effect from the 30 October 2024 as follows:

Trustee independence requirement: which prevents sellers or persons connected with them from retaining control of the trading company, following the sale to the EOT, via the trust arrangements.
Residence requirement: the EOT trustee must be resident in the UK (i.e. offshore trustees are no longer permitted).
Market value: the trustee(s) must take all reasonable steps to ensure that the consideration paid for the shares purchased by the EOT does not exceed market value and the interest rate on deferred consideration does not exceed commercial rates.

A disqualifying event has consequences for the Seller and/or the EOT, depending on when it occurs. If an event occurs in or before the fourth tax year following the disposal of the shares to the EOT, the Seller will be liable for CGT on the gain in the value of the shares from the Seller’s base cost at the time of disposal to the EOT. If the disqualifying event occurs after the fourth anniversary, there is a deemed disposal and immediate re-acquisition at market value by the EOT of all the shares it originally purchased, resulting in a CGT charge to the EOT. The employees will, therefore, need to factor in the tax charge as part of the costs of a future sale of the trading company owned by the EOT. If the sale occurs before the Seller has been paid in full, then that part of the proceeds will be due to the Seller, as a sale of the trading company will entitle the Seller to demand the balance of deferred consideration.

Major decisions to be made by the EOT will be within the control of the EOT trustees, usually on a unanimous basis, so there will be checks and balances before any decision that could lead to a disqualifying event.

The risks and rewards

An EOT offers several advantages, in addition to the tax benefits available to the Seller and the EOT, including:

Simpler process – as compared to a sale to a third party, where the Seller will need to provide warranties and negotiate documentation for the sale with the Buyer and have ongoing liability for a period post sale.
Flexibility – so long as the EOT has a majority interest, a Seller can choose to retain shares in the target company (noting they will not attract CGT relief when sold in the future).
Higher return – the sale proceeds are tax-free, giving the Seller greater flexibility as to the price to be paid by the EOT for the shares.
No third party is required – provided the Seller has a team that can continue the business, then it avoids the need to find a Buyer.
Preservation of identity – as ownership of the company will not be transferred to an external third party, the values and identity of the company are likely to remain the same.
Engaged employees – employees are given the opportunity to share ownership of the company, which should lead to greater engagement, innovation, and profitability, provided the terms of the sale to the EOT are reasonable.
Reduced corporation tax – where profits are being distributed using the tax free (but not NIC free) bonus, then the profits subject to corporation tax will be reduced; and
EMI schemes – it is still possible to incentivise key employees alongside the implementation of the EOT through share incentive schemes.

There are risks mostly stemming from disqualifying events that can trigger the loss of the CGT relief by the Seller or result in a deemed sale and immediate reacquisition of the sale shares, giving rise to a CGT charge, depending on when the event occurs. These risks are managed by ensuring you take advice at all appropriate times and seek assistance from professionals with expertise in EOTs.

For information, please read our article on the effect of the Autumn Budget 2024 on EOTs

How can we help?

If you are considering your options for succession planning, Tees Law has a large team that can advise you on all aspects of business succession planning, including EOTs and other employee benefit trusts. We are always happy to liaise with your tax advisers to ensure that any succession plans will work in the way that they are intended to.

Please get in touch with Tracey Dickens or Lucy Folley, who will be pleased to assist you.

Tax changes in autumn budget 2024: Making employee ownership trusts (EOTs) more appealing?

Posted on 13 December 202419 March 2025 by Sarah O'Sullivan

Capital Gains Tax (CGT) and relief changes: How do these relate to EOTs?

The Autumn Budget 2024 saw CGT rates rise to 18% and 24% with effect from 30 October 2024, up from 10% and 20% for lower and higher rate taxpayers, respectively. There are also phased changes to Business Asset Disposal Relief (BADR), it remains at 10% until April 2025 and will increase to 14% for disposals made on or after 6 April 2025 and 18% of disposals made on or after 6 April 2026.

BADR is available on qualifying capital gains arising on disposals of certain assets, including shares in trading companies, provided the shares have been held for two years before disposal, the seller has been an officer or employee of the company and holds at least 5% of the ordinary share capital. There is a £1 million cumulative lifetime limit for disposals on or after 11 March 2020.

With the CGT rates on a sale to an Employee Ownership Trust (EOT) being 0%, these increases in CGT rates might mean that EOTs are more attractive compared with a traditional sale.

Such generous tax relief, while attractive, is not the only consideration when contemplating an EOT. It will be important to consider:

The future profitability of your company, since the purchase price tends to be funded from future company profits over quite a long period of time (five to 10 years) and be able to fund growth.
Whether your employees are ready for the transition, to ensure the company can sustain or grow its profitability.
Whether you are ready to hand over control of your business to the EOT. While a selling shareholder may continue to work in the business and sit on the board of the EOT and the company, they will not be able to form a majority on the board of the trust, and the trust will have ultimate control of your company.

EOTs – What has changed?

During the Budget, the Government also announced changes to EOT legislation, following a consultation in 2023, but these are unlikely to impact EOTs greatly, with many of the practices that have been tightened up already being followed; that is certainly the case for the EOTs we at Tees have been advising on. The changes apply from 30 October 2024.

The announced changes:

Ensure that former owners (and persons connected with them) cannot retain control of the company post-sale by retaining control of the EOT.
Require that the trustees of the EOT are UK residents at the time of disposal to the EOT
Require the EOT trustee to take reasonable steps to ensure that the price paid for the company’s shares do not exceed market value.
Requires individuals to provide additional information to HMRC at the point of claiming the relief.
An increase to the timeframe within which relief can be withdrawn from the selling shareholders if there is a disqualifying event (i.e. a breach of the EOT conditions) post-disposal, extending it from the end of the first tax year to the end of the fourth tax year following disposal.
Makes a small adjustment to the conditions for obtaining Income Tax relief on annual bonuses made to employees of EOT owned companies, to allow for directors to be excluded from the bonus award.
Provides legislative certainty over the distributions tax treatment of contributions paid to the trustees of an EOT to repay the former owner for their shares, by introducing a specific relief which covers such contributions, which should mean fewer HMRC clearance applications relating to EOT transfers.

Are EOTs worth considering?

With the imminent changes in CGT, and the EOT legislative structure remaining aligned with current practice, EOTs are an attractive solution for addressing succession in some businesses. The interest in EOTs has increased in recent years, with many seeing them as a viable option that benefits their company and themselves, and we expect that trend to accelerate.

Tees Law have the expertise and experience to assist shareholders with the transfer to an EOT, protecting their interests by ensuring the documentation meets the legislative requirements and protects against the occurrence of disqualifying events.

How can we help?

If you are considering your options for succession planning, Tees Law has a large team that can advise you on all aspects of business succession planning, including EOTs and other employee benefit trusts. Please get in touch with Tracey Dickens or Lucy Folley, who will be pleased to assist you.

Tees Law continues to drive growth plans with two new Partner lateral hires

Posted on 3 October 202429 March 2025 by Sarah O'Sullivan

Tees Law is delighted to announce the appointment of two new Partners, Tracey Dickens and Victoria Sandberg, effective October 2024.

Tracey Dickens joins Tees as a Partner in their Corporate and Commercial team after a long career with Birkett Long, where she headed up their Commercial department. Tracey has a wealth of experience working with a wide range of business clients and has a profound specialism advising the health sector and in particular care home transactions and medical partnerships, acting for doctors and other healthcare professionals in relation to partnership and business matters for over 22 years. Tracey joins Tees’ already growing Corporate and Commercial team, who act for a variety of independently owned and managed businesses including several listed in the Grant Thornton Top 100 report for Essex and Hertfordshire.

Tracey said: “I am delighted to be joining Tees Law’s impressive Corporate and Commercial team, and I am very much looking forward to helping drive forward their ambitious growth plans and becoming a trusted advisor to their business clients.”

Tracey is recognised by the Legal 500 as a Leading Partner in the Commercial and Corporate Sector and Public Sector (Healthcare) and is often praised for her balanced and pragmatic approach in helping businesses to find solutions that ensure a successful outcome.

Victoria Sandberg joins Tees as a Partner in the Commercial Property team and has a particular specialism in rural land. Victoria acts for a wide range of clients, including various estates in relation to both disposals and property management. Her clients include businesses, farmers, investors, owner-occupiers and high net-worth individuals spread predominantly across Hertfordshire and the neighbouring counties. Victoria joins Tees’ significant Commercial Property team of 30+ legal advisors and partners. She will be based in Tees’ Royston office.

Victoria is recommended by Legal 500 as a Leading Individual for Agriculture and Estates work. She will play a pivotal role in the continuing strength of Tees’ Agriculture, Rural and Estates practice.

Victoria said: “I am thrilled to be joining Tees and to being part of the fantastic Agriculture, Rural and Estates team. It is such an exciting time to be joining.”

Managing Director Ashton Hunt, said: “We are thrilled to welcome both Tracey and Victoria and delighted they have chosen to further their careers with Tees. They were both attracted to Tees because of our reputation and track record of delivering on our strategic goals and are both well placed to help us drive forward our ambitious growth strategy for 2028. This takes our partner headcount to 28 and will add additional weight to our growing corporate and commercial and commercial property expertise.”

Tees advises on sale of GTES Holdings to STS Aviation Group

Posted on 6 August 202429 March 2025 by Sarah O'Sullivan

Tees has advised long-standing client Greg Macleod on the sale of GTES Holdings Limited to STS Aviation Services, part of the STS Aviation Group.

GTES Holdings Limited is the holding company of GT Engine Services Limited (GTES), a jet engine care business based at Stansted Airport. GTES offers a wealth of aircraft maintenance, repair and overhaul (MRO) services and is one of the world’s leading aircraft repair and engine maintenance companies. GTES works with some of the biggest names in global aviation and seeks to provide engine management services in accordance with current Civil Aviation Authority (CAA), European Union Aviation Safety Agency (EASA) and Federal Aviation Administration (FAA) quality standards.

STS Aviation Services (STS), part of the STS Aviation Group, provides aircraft MRO services globally. STS is now the largest independent MRO in the United Kingdom and has an expanding footprint in Europe. The acquisition of GTES by STS builds on its strategy of being a single point solution for MRO services and further promotes STS’ growth ambitions.

Greg Macleod, former CEO of GTES, said: “The team at Tees worked tirelessly to put this deal together, offering valuable advice and support, their communication was top class even when we were faced with dealing with parties across several time-zones. I am delighted with the result and would thoroughly recommend their services.”

Corporate Partners Lucy Folley and Baljeet Kaur led the transaction on behalf of Tees, overseeing a diverse team of experts who provided comprehensive support. The team included professionals from Tees commercial property team, led by Partner Daniel Fairs, who advised on the real estate elements for the various units occupied at Stansted Airport.

Lucy Folley said: “Working alongside Greg for many years, we have seen GT Engine Services achieve considerable growth. When Greg decided it was the right time to realise the value of his many years’ hard work and sell his shares in GT Engine Services, we were delighted to assist him. It was a pleasure to guide Greg through the legal process involved and we wish him and the STS team every success in the future.”

Mr Macleod will remain a key member of the senior leadership team at GTES in the role of Managing Director, Engine Services.

Tees worked closely with Rob Dukelow-Smith and Amie Goodlad of Forward Corporate Finance, who advised on the tax and financial components and assisted in constructing the deal. Peters Elworthy & Moore (PEM) advised on the tax and accounting aspects

Tees to sponsor new award at Eastern Echo Awards

Posted on 13 May 202429 March 2025 by Sarah O'Sullivan

Tees Law is set to sponsor a brand-new award for Responsible Employer of the Year at the Eastern Echo Awards. Now in their third year, the awards will take place on the evening of Wednesday, 26 June, in Cambridge to celebrate the best of the East of England’s property industry.

The black-tie event will be attended by leaders from across the property sector and country, with our very own Commercial Property team due to attend to present the new award.

Tees is a top-tier Legal 500 commercial property firm. Our clients include national and international investors, trusts and pension funds, national retailers, trading companies, local authorities, private and public healthcare providers, schools, and colleges. Tees is also a national panel member of the NFU (covering Hertfordshire, Essex and Suffolk) – one of only 16 law firms on the panel. This is a recognition of the outstanding quality of our service and expert knowledge of both agricultural law and a broad range of legal services for families and businesses.

Partner and head of Commercial Property in Cambridge, Sarah Coates, said: “Responsible business strategy is at the heart of Tees Law and in one of the most unequal cities in the UK, where there is still so much focus on the need for growth and development, it is essential that this remains the case. Tees Law is proud to be sponsoring this award and give others a platform to showcase their efforts to ensure “good growth” in the city.”

New for 2024, the award for Responsible Employer of the Year is being sponsored by Tees and organisers asked to hear from a company/consultant/project team that can demonstrate how successful it has been in delivering a responsible business strategy. Measurables were to include how businesses incorporated innovation, adoption of social responsibility, engagement in the local community, approach to the environment and governance or feedback from clients or a supply chain on the approach taken to do responsible business.

Excitingly, the shortlisted teams and individuals have now been announced following submissions from leading professionals.

(Responsible) Employer of the Year (sponsored by Tees)

Gen Two Real Estate
KMC Transport Planning
Lanpro Services
RG Carter
Saunders Boston Architects

The Eastern Echo Awards is targeted at projects, people, and places across the East of England and will be judged by a panel with extensive experience and knowledge. The panel covers a range of property sectors, including office, industrial, retail, life science, and residential.

The design of the awards itself is responsible, considering the need to reduce carbon footprint. The event’s location is deliberately near public transport, and digital ticketing is implemented to limit the use of paper.

Managing Director Matthew Battle at the UK Property Forums, who is organising this event, said: “The quality and range of projects submitted this year have been truly impressive, and we have easily exceeded last year’s total of entrants. This has ensured that the judges had their work cut out.

“The competition is very strong. Entries have come from all corners of the East for the 12 awards which will be up for grabs at a black-tie awards night dinner on 26 June at Homerton College, Cambridge.

“One notable feature of this year’s submissions is the wide-ranging geographical locations many have come from, including Stevenage, Welwyn, Norwich, Peterborough and Cambridge.”

All shortlisted businesses and projects can be viewed online: https://ukpropertyforums.com/shortlist-unveiled-for-eastern-echo-awards/

The judges have been busy looking at submissions that cover the 12 months of 2023 and have organised site visits to assess progress. We look forward to attending Homerton College in Cambridge in June to see who is awarded on the night and network with fellow commercial property professionals.

Tees demonstrates support for Essex and Cambridgeshire businesses with the appointment of two new Commercial partners

Posted on 13 October 202329 March 2025 by Sarah O'Sullivan

Leading law firm Tees has demonstrated its commitment to increasing its ability to provide a wider range of pragmatic legal advice to more businesses in the region with the appointments of Claire Powell, a partner in Company and Commercial based in Chelmsford and Brentwood and Sarah Coates as Partner and Head of Commercial Property based in Cambridge and providing support across the region. Both have more than 20 years of experience and joined Tees in September.

Claire is a Corporate and Commercial expert, working on acquisitions and disposals, restructuring, mergers and demergers, joint ventures and all types of commercial contracts. She was previously a partner in the firm of Thompson Smith and Puxon and thrives when working with businesses that need sensible, pragmatic and decisive advice. She also specialises in advising GP practices, care homes and dentists.

Sarah has expertise in residential development and development finance work, as well as in assisting educational establishments and companies in the tech/life science sphere with their wide-ranging property needs. Sarah also has a passion for supporting charitable and social enterprise initiatives in Cambridge, most notably acting as Chair of Trustees for the Cambridge Cyrenians, a charity supporting those at risk of homelessness in and around Cambridge. She has practised in Cambridge for 17 years and previously worked for International law firm Penningtons Manches Cooper.

Commenting on her appointment, Claire said: “I’m delighted to join this leading regional law firm and be part of Tees’ ambitious plans to reshape the legal landscape for Essex businesses. Essex is thriving with a multitude of successful businesses serving London and the world but for too long the provision of legal services has been lacking. Tees is committed to changing that and leading the way in doing business responsibly.”

Catherine Mowat, Senior Partner, stressed the significance of these new appointments: “We are delighted to welcome Claire and Sarah into the Tees’ partnership. We have identified that businesses in Essex are underserved by the current legal offering. By appointing two senior and experienced specialists, we are growing our Commercial teams and expanding our offering in line with our 2028 Strategic Growth Plan. Our aim is to better serve the local business communities in all the areas we work and these appointments will help us do just that.”

Tees Law now boasts six Top Tier practice areas in Legal 500

Posted on 6 October 202329 March 2025 by Sarah O'Sullivan

Tees Law enjoyed widespread success in this year’s Legal 500 directory, adding Private Client – Personal tax, trusts and probate in Essex to the highest Top Tier ranking.

Ian Johnston, Partner and lead of the Private Client team in Tees’ Essex based offices of Chelmsford, Brentwood and Saffron Walden, moved up the rankings becoming a Next Generation Partner. One client commented, “Ian Johnston is a fine example of the ability of the firm to deliver the human approach to what can be very serious discussions.”

The Personal tax, trusts and probate team is described as having an “outstanding reputation for quality” and as being “consummately professional, and yet provide a service which feels warm, friendly and personal. All considerations are covered and delivered in an understandable yet thorough manner.”

In total, 27 different Tees Law practice areas were ranked in the latest update of the world’s leading directory of Law Firms.

Tees Law was delighted to see a total of 8 Leading Individuals, 5 Next Generation Partners and 7 Rising Stars. A staggering 46 of the firm’s solicitors have been listed as Recommended Lawyers with an increase of 16 this year.

Tees Law is a major regional law firm with offices in Bishop’s Stortford, Cambridge, Royston, Saffron Walden, Brentwood and Chelmsford. As part of the local community for over a century, Tees Law has supported clients from generation to generation.

The recurring theme throughout the client testimonials published this year highlights the firm’s focus on the client’s needs. An Essex Commercial Property client stated, “The team are great to work with. They all put each case in such high regard. All members of the team are professional and hold your best interest as a client highly.”

Another client praised “A first class firm with many talented individuals. Their client focus, commerciality and friendliness has been outstanding.”

Group Managing Director at Tees Law, Ashton Hunt, commented: “Once again the success and dedication of our teams and individuals shines through in the Legal 500 rankings. I am delighted to see so many practice areas receiving accolades and to have increased our number of Tier 1 rankings. At Tees, we always strive to be renowned experts and provide personal and commercially tailored advice to our clients.”

Catherine Mowat, Senior Partner at Tees Law, who was this year named in the Hall of Fame, added: “This year’s results highlight the diligence and commitment of our highly skilled teams. It is an honour to be named in the Hall of Fame and I would like to thank all of our clients and referrers for their wonderful feedback.”

Tees advises Compliance Labelling Solutions on sale to Asteria Group

Posted on 24 July 202327 March 2025 by Sarah O'Sullivan

Tees are delighted to have advised the shareholders of Compliance Labelling Solutions (CLS) on its sale to the Asteria Group (Asteria). Based in Braintree, Essex, CLS is a BRC and ISO-certified label and tag manufacturer with over 40 years of experience serving clients across a range of different sectors. The business is highly respected in the industry and is known by its customers for high quality levels of service & product.

Asteria is an international group that produces a wide range of printed packaging materials such as labels, flexible packaging, and boxes. The group has grown rapidly and currently has thirty-three production sites in Belgium, the Netherlands, France, Germany, Denmark, Spain, UK, Estonia, Ireland, and Finland. This is Asteria’s third acquisition in the UK, following CS Labels and Berkshire Labels. The transaction will allow the Asteria Group to consolidate its footprint both in the UK and the food and beverage area.

After acquiring the company through a management buy-out back in 2015, the shareholders of CLS were looking to find the right partner to take the business forward while providing stability for its employees and customers. Asteria proved to be a perfect fit, as, despite its size, it maintains the SME spirit and will enable CLS to continue guaranteeing fast delivery times and excellent service levels to its customers. The opportunity to share knowledge and skill amongst the group also presents a significant opportunity for CLS under the ownership of Asteria. CLS will continue to be led by its current management team, Matt Day, and Geoff Nunn.

The Tees corporate team advising on the transaction was led by Partner Lucy Folley, with assistance from Associate Natasha Bhandari and Solicitor Nana Poku. Senior Associates Lucy Beck and Katherine Jameson provided support on the property and employment aspects of the transaction respectively.

Commenting on the transaction Matthew Day, Director, CLS said, “The expertise and professionalism of Tees made what was a daunting task manageable and painless. With a knowledgeable team on hand working hard on our behalf, it helped achieve a deal that satisfied both sides and ensured the continued success of Compliance Labelling Solutions.”

Geoff Nunn added, “It was a pleasure working with Tees, the level of advice received was excellent and the whole team worked extremely hard to ensure tight schedules were met throughout the sale process.”

Lucy Folley commented “We were delighted to support Geoff and Matt on the sale of their highly successful business and guide them through the legal process to achieve a successful outcome. The sale is excellent news for all parties involved and we wish everyone involved all the best for the future”

Rob Dukelow-Smith, Director Forward Corporate Finance who, together with Amie Goodland, assisted Geoff and Matt in finding the buyer commented, “It was a pleasure to assist Matt & Geoff on the sale of a really well-run business to an excellent acquirer. The positive outcome all around is a testament to all their hard work, and we wish Matt & Geoff every success with their new owners.”

Tax advice for Matt & Geoff was provided by David Richardson and Christine Ingram at Croucher Needham.

Tees advises Savage Haulage Limited on its sale to The Ice Co Storage & Logistics Holdings Limited

Posted on 22 June 202327 March 2025 by Sarah O'Sullivan

Tees has advised the sellers of Savage Haulage Limited (Savage Haulage), one of the largest temperature-controlled storage and logistics businesses in East Anglia, on the sale of Savage Haulage to The Ice Co Storage & Logistics Holdings Limited (Ice Co).

Savage Haulage has been a family business for 60 years and has been managed in recent years by brothers Martyn and John Savage. It has sites in both March and Thetford and, in 2021, Savage Haulage generated £5.9 million in turnover. Ice Co operates from sites in Newcastle, Preston and Doncaster, and provides storage, logistics, blast freezing and tempering services. Ice Co’s acquisition of Savage Haulage represents a sizeable step forward for Ice Co in terms of its geographic reach nationally.

Martyn Savage, joint MD of Savage Haulage commented: “The Ice Co are a family company with the same values and ethics as ourselves. They are committed to continuing the existing operations retaining our existing personnel in the same positions and creating further opportunities in East Anglia as they take the business forward.”

Lucy Folley, Partner at Tees Brent wood, Baljeet Kaur, Senior Associate at Tees Brentwood, and other members of the Corporate team at Tees advised Martyn Savage and the other owners of Savage Haulage on a suite of transaction documents, including a complex share purchase agreement and intricate disclosure letter. Lucy was practical in her approach to ensuring that the owners of Savage Haulage understood the legal implications of their commercial decisions and utilised her deep knowledge of the logistics industry to navigate any potential issues arising. The Corporate team worked seamlessly and collaboratively with the Commercial Property team, which was led by Senior Associate Daniel Fairs.

Lucy Folley commented: “We are delighted to have advised the sellers of Savage Haulage Limited on such a monumental transaction in the transport and logistics industry. The sector has faced inflationary challenges in the form of rising fuel, energy, and labour costs. Following a slowdown in consolidation during the pandemic, we are now seeing a strong resurgence in interest in mergers and acquisitions as businesses seek to capitalise on strategic opportunities and enlarge their geographical footprints. Tees is known for acting for both purchasers and sellers in the transport sector; this transaction showcases both the firm’s deep logistics expertise and the sheer importance of M&A deals we are advising on.”

Tees collaborated with Price Bailey, advising the sellers of Savage Haulage on the financial and accounting aspects of the multi-million-pound transaction.