EBT/EOT—tax treatment

Copyright © 2025 LexisNexis

Employee benefit trusts (EBTs) are discretionary trusts for the benefit of employees. For more information regarding EBTs generally, see Practice Note: What is an employee benefit trust?

Onshore versus offshore EBTs

Some EBTs are established offshore (ie are non-UK resident) and some are established onshore (ie are UK resident).

Companies often opt to use onshore EBTs for cost reasons, particularly if the trustee’s duties are both simple and infrequent. In addition, an EBT used in connection with a share incentive plan (SIP) (or in respect of an employee ownership trust to which a company is sold on or after 30 October 2024) must be a UK resident trust. However, in other cases there are a number of commercial and tax reasons for establishing an EBT offshore, including:

  1. •

    the trustee sector in many offshore jurisdictions is very well advanced, offering companies a very useful outsourced service for administrating their EBTs

  2. •

    the range of independent trustees can help to avoid some of the issues that can be problematic for trusts that are established using company personnel, and

  3. •

    the tax position can be significantly more advantageous for an offshore

To view the latest version of this document and thousands of others like it, sign-in with LexisNexis or register for a free trial.

Existing user? Sign-in TAKE A FREE TRIAL
Powered by Lexis+®
Latest Share Incentives News

Share Incentives weekly highlights—25 September 2025

This week's edition of Share Incentives weekly highlights includes a focus on executive pay as the AGM season comes to an end.

CIOT submits technical proposals on Draft Finance Bill IHT pension changes

The Chartered Institute of Taxation (CIOT) has submitted detailed policy proposals and technical questions to HMRC regarding the Draft Finance Bill 2025-26 legislation on inheritance tax (IHT) and pensions. The submission, dated 19 September 2025, outlines eight specific proposals addressing Personal Representatives' liability for IHT on pension funds, including recommendations for a 50% pension fund retention mechanism and amendments to the legisaltion as regards discharge certificates. CIOT also raised 20 technical questions.

Share Incentives weekly highlights—18 September 2025

This week's edition of Share Incentives weekly highlights includes the CIOT’s response to the government’s consultation on modernising and mandating tax adviser registration with HMRC.

Share Incentives weekly highlights—11 September 2025

This week's edition of Share Incentives weekly highlights includes (1) a focus on executive pay, as the AGM season comes to an end and (2) a new Q&A which looks at whether an employee can participate in two different companies’ EMI schemes.

View Share Incentives by content type :  
News
Practice notes
Precedents
Q&As

Popular documents

Priority between loss reliefs in loss making companies

Priority between loss reliefs in loss making companiesWhy does it matter?A company that is a member of a group and has incurred any of the types of losses available for surrender by way of group relief may, without any further rules, have more than one way in which to use the loss. There are a

What is the difference between an appeal and a review?

What is the difference between an appeal and a review?What is an appeal?An appeal in insolvency proceedings is no different to an appeal in normal litigation. An appeal will be allowed only if the appeal court is satisfied that the decision of the lower court was 'wrong' or 'unjust because of a

If a rentcharge is shown as being informally exonerated on title information, does this apply to the

If a rentcharge is shown as being informally exonerated on title information, does this apply to the current registered owner? Or does the informal exoneration only apply to the parties to the document which informally exonerated the rentcharge?This Q&A considers the situation where, at some

Strike out—making an application to strike out a statement of case

Strike out—making an application to strike out a statement of caseA strike out order can be made either following an application by the parties or on the court's own initiative. This Practice Note deals with the scenario of the order being made following a party's application.Making an application
Priority between loss reliefs in loss making companies

Priority between loss reliefs in loss making companies

Priority between loss reliefs in loss making companiesWhy does it matter?A company that is a member of a group and has incurred any of the types of losses available for surrender by way of group relief may, without any further rules, have more than one way in which to use the loss. There are a

What is the difference between an appeal and a review?

What is the difference between an appeal and a review?

What is the difference between an appeal and a review?What is an appeal?An appeal in insolvency proceedings is no different to an appeal in normal litigation. An appeal will be allowed only if the appeal court is satisfied that the decision of the lower court was 'wrong' or 'unjust because of a

If a rentcharge is shown as being informally exonerated on title information, does this apply to the

If a rentcharge is shown as being informally exonerated on title information, does this apply to the

If a rentcharge is shown as being informally exonerated on title information, does this apply to the current registered owner? Or does the informal exoneration only apply to the parties to the document which informally exonerated the rentcharge?This Q&A considers the situation where, at some

Strike out—making an application to strike out a statement of case

Strike out—making an application to strike out a statement of case

Strike out—making an application to strike out a statement of caseA strike out order can be made either following an application by the parties or on the court's own initiative. This Practice Note deals with the scenario of the order being made following a party's application.Making an application