Taxes Consolidation Act 1997 Schedule 12 paragraph 17

Restriction on trust deed provisions

Paragraph 17 requires that an employee share ownership trust (ESOT) deed must not contain any features beyond those essential or reasonably incidental to its core purpose of acquiring and transferring sums and securities.

• The ESOT trust deed must not include features that go beyond what is essential or reasonably incidental to its stated purpose.
• The permitted purposes are acquiring sums and securities, transferring sums and securities to employees and directors, and transferring securities to the trustees of an approved profit sharing scheme.
• The profit sharing scheme referred to must be one approved under Part 2 of Schedule 11.
• Any provision in the trust deed that is unrelated to these core functions will cause the trust to fail to meet this requirement.