The other can of worms is indeed payment. The P1/PPL has to pay at least an equal share of the direct costs of the flight, or it starts to become "aerial work". In the case of the student owning the airplane, but legally just being a passenger along for the ride, I guess the student can invite two other pax, and pay the share for those pax as well. Nothing illegal in that. So then the P1/PPL only pays 1/4 of the direct costs.
What you are speaking of is UK regulations. The posters location is given as Rep of Ireland, where there are no similar cost sharing provisions. The P1 must pay the full cost of the flight.
You may find that the POH or insurance insists that P1 is in the left seat and students are P1 in the left seat but u/t is the get out for the instructor in the RHS:-)
There is no way a student can be P1 in the left seat but u/t. There are either P1 or are u/t....can't be both at the same time! If an instructor is giving training to an SPL, then the instructor is P1.
I've never heard of an insurance company insisting the P1 sits in the left seat (unless the POH requires it for some reason). Most people who go on about insurance requirements, have never read their insurance policy.
I suppose a good way of looking at this is why would you want an SPL in the left seat, and a PPL in the right seat? The only good reason I can think of is to help the SPL get more left hand seat experience while flying, which seems to be illegal training by a non instructor. Like most of these things, you will get away with it if nothing goes wrong. But if something goes wrong, everyones assumption will be that there was illegal training going on, and you'll have to be able to defend yourself pretty convincingly, which mightn't be so easy to do.
dp