Taxes Consolidation Act 1997 Schedule 12 paragraph 6

Requirements for establishing an employee share ownership trust (ESOT)

Paragraph 6 of Schedule 12 sets out the basic requirements for establishing an employee share ownership trust (ESOT), including who may establish the trust and the conditions that must be met at the time of establishment.

• The trust must be established under a formal document known as the trust deed.
• The trust must be established by the founding company.
• At the time the trust is established, the founding company must not be controlled by another company.
• A specific exception to the control rule applies where a trustee savings bank has been reorganised into a company.