Taxes Consolidation Act 1997 Schedule 12 paragraph 2

Approval of an employee share ownership trust (ESOT)

Paragraph 2 of Schedule 12 sets out the process by which the Revenue Commissioners approve an employee share ownership trust as a qualifying employee share ownership trust, including restrictions where the founding company is part of a group.

• A body corporate (the "founding company") that has established an employee share ownership trust may apply to Revenue for approval as a qualifying employee share ownership trust, provided the conditions in paragraphs 6 to 18 are met.
• Where the founding company is a member of a group of companies, Revenue will not approve the trust unless satisfied that it does not confer benefits wholly or mainly on directors or on the higher or highest paid employees within the group.
• A "group of companies" means a company and any other companies it controls or with which it is associated.
• Two companies are treated as associated where they act in pursuit of a common purpose, where persons with a reasonable commonality of identity can determine the trading operations of both, or where both are under the control of such persons.