Jurisdiction(s):
United Kingdom

Related legal acts

Key definition

Employee Benefit Trust definition

What does Employee Benefit Trust mean? An employee benefit trust (EBT) is a discretionary trust used in employment and rewards practice to hold and apply assets for the benefit of employees and former employees of a company (or its parent) and its subsidiaries, and certain dependants. The employer typically settles funds or shares on independent trustees, who exercise discretion within a specified beneficiary class and in accordance with the trust deed. The term is descriptive rather than a defined statutory concept, though UK tax legislation and HMRC guidance refer to EBTs in the context of third‑party remuneration; in Ireland, employee share ownership trusts...

Employee Benefit Trusts (UK): Legal Framework, Establishment and Use in Share Incentives, Trust Deeds, UK Listing Rules, Tax (IHT, Income, CGT, Part 7A), Independence and FRS 102 Accounting

Published by a LexisNexis Share Incentives expert

Practice notes

The EBT as a trust

An employee benefit trust (EBT) is a type of trust. A trust is the legal arrangement created by a settlor when assets are placed under the control of a trustee for the benefit of a beneficiary, or to achieve a specified purpose.

A trust (including an EBT) typically has these characteristics:

the assets form a separate fund and do not belong to the trustee’s own estate
legal title to the trust property is held in the name of the trustee
the trustee has the power and duty, for which it is accountable, to manage, apply, or dispose of the assets in line with the trust terms and the special obligations imposed by law

As a general rule, a trust (including an EBT) must have certainty of objects, and for non-charitable trusts such as an EBT, there must be someone in whose favour the court can enforce the trust. It is settled law that a trust established for the benefit of employees in general is valid, so long as it does not breach the rule against perpetuities...

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Jeremy Glover (Share Schemes)

Jeremy is a senior incentives lawyer who has over 18 years' experience advising businesses on their employee and executive incentives and share plans. Jeremy's practice focuses on the field of remuneration, executive pay, employee share plans and management buyouts. Jeremy advises a broad range of clients including multinationals, quoted companies, privately owned companies (family, owner-managed businesses, venture capital backed and private equity backed). He also provides specialist expert advice to other professional advisers such as accountants, tax advisers and remuneration consultants for their clients. Jeremy has worked in private practice and in-house and enjoys advising clients using the benefit of both perspectives. Jeremy used to head up the incentives practices at Reed Smith LLP, Stephenson Harwood LLP and the Entrepreneurial Group at EY in London. Jeremy is now a senior consultant to a number of law and accounting firms including Reed Smith LLP, PWT Advice LLP and...

Web page updated on 21/05/2026

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