Dublinpilot,
You are 50% correct.
There is no restriction on cost sharing in Ireland. Thus you can have an 8 seater and share the cost 8 ways within a club environment.
AS to illegal instruction there you are correct. The only reason for a passenger to occupy a pilot seat is to perform some pilot function. A PPL in the right seat and a student in the left it would be hard to convince anyone that the pilot simple sat their passenger in the left seat for convenience and that there was no element of instruction. Especially after a landing accident when under oath the pilot is asked who was manipulating the controls during the landing?
In the UK, if you let a passenger have a go then by definition if they are not qualified there is some element of instruction. That makes it aerial work. Provied that there is no payment at all for the aerial work i.e. the PPL pays the full costs then there would not be any case to answer as it would be hard to prove that the student gained a benifit from the "training" even if it did shorten or prevent an over-run in their dual time to solo or to skill test.
In simple terms, the pilot in command sits in the pilot seat and passengers sit in the others. If a pilot uses a passenger seat while seating a passenger in the pilot seat and then has an accident / incident, everyone is going to ask why were they not in their seat?
Finally, letting someone have a go for a while in the cruise at a safe height is one thing, letting them land or take-off is something that instructors are trained to supervise and react to and somthing that takes practice to do properly. Not for the basic ppl hoping to have a safe flight.
Regards,
DFC