We are just in the process of setting up an EOT. Company has currently 3 directors paid via PAYE/Dividend by virtue of a class of share, each director owing 1 A share. The company ownership is split between 7 shareholders (the 3 above included) with 60,000 ordinary shares between them.
The current Directors will be retiring and from the point the EOT is set up they will no longer be drawing Dividends themselves (surrendering their A share).
The intention is to set up the EOT and the new board will be paid using the award of 1 A share to allow the mix of dividend and PAYE.
The trust will own greater than the 51% required of ordinary shares (probably 100%).
The only item we cannot seem to find a definitive answer to is:
Is it allowable to have A shares used for the purpose of paying the management team via Dividends when there is an EOT in place.
Various references to it being allowed can be found but no real clarity to allow us to proceed.
Can anybody point me in the right direction for a more definitive answer?