What is an Employee Benefit Trust (EBT)?

An EBT is a discretionary trust that holds shares in a company on behalf of its employees. It is not a share plan in itself, but a vehicle that supports one.

EBTs are especially useful in private companies, because they can create an internal marketplace in which employee shares are bought and sold. That is often simpler and more tax-efficient than a company share buyback and cancellation. They can also be used to ringfence a set number of shares, protecting existing shareholders from dilution.

Read more about EBTs and trustee services.