Cwmpas Statement on UK Government Changes to Employee Ownership Tax Relief

Cwmpas notes the UK Government’s decision to reduce Capital Gains Tax relief for Employee Ownership Trust transitions from 100% to 50% and is working to ensure clarity on the details, which are urgently needed to give confidence to businesses already in the process of succession planning and for those who may consider it in the future.  

The growth in the employee-owned sector across the UK since the CGT relief was introduced has demonstrated the impact of the policy. However, we know that this is just one of the motivating factors for businesses exploring transition to employee ownership.  

The model is one of the most effective ways to ensure long-term business sustainability, recognition for employees, continued benefits for local economies and communities, and a fair deal for business owners. The continued 50% relief for owners is acknowledgement of this and the key role the model has in ensuring the sustainability of resilient, productive and locally-rooted businesses in Wales and across the UK.  

The momentum behind employee ownership is strong and continues to grow after our recent celebration of the 100th employee-owned business in Wales. We are seeing more owners explore EO as a succession route, and we are ambitious about the role it can play in creating a stronger and fairer Welsh economy. We want to build on this achievement and double the number of EO businesses again by 2030.  

Our Employee Ownership Wales team will continue to advise and support businesses through this change and Cwmpas will contribute fully to the UK Government’s Call for Evidence on growing the co-operative economy. Our full response to the Employee Ownership Association’s call for evidence regarding the CGT relief changes – detailing the practical implications for Welsh SMEs and the clarity needed – is available here.