Income Tax (Earnings and Pensions) Act 2003 section 71

Establishment of trustees

Section 71 sets out the requirements for establishing a body of UK-resident trustees to manage a share incentive plan, including their duties, the legal structure of the plan trust, and rules about the composition of the trustee board.

• A share incentive plan must establish a body of UK-resident trustees responsible for acquiring and allocating shares (free, matching, partnership or dividend shares) in accordance with the plan rules.
• The trustees' functions must be governed by a "plan trust" constituted under UK law, with its terms set out in a "trust instrument" that complies with the relevant Schedule requirements.
• The trust instrument must not include any terms beyond those that are essential or reasonably incidental to meeting the Schedule requirements.
• The trust instrument may include provisions defining professional and non-professional trustees, requiring a minimum of one professional and two non-professional trustees, and requiring that at least half of the non-professional trustees are employee-selected.