Readily convertible assets

Copyright © 2026 LexisNexis
Produced by a Tolley Personal Tax expert
Personal Tax
Guidance

Readily convertible assets

Copyright © 2026 LexisNexis
Produced by a Tolley Personal Tax expert
Personal Tax
Guidance
imgtext

Where a share (or other qualifying asset) acquired by the employee is a readily convertible asset (RCA), both income tax and Class 1 national insurance contributions (NIC) are due on the money’s worth of the shares, and these amounts must be collected by the employer via the payroll.

The concept of RCA also extends to various other liabilities under the employment-related securities legislation. See the Employment-related securities guidance note.

Definition of a readily convertible asset

An RCA is an asset capable of being sold or otherwise realised on:

  1. •

    a recognised investment exchange (within the meaning of the Financial Services and Markets Act 2000)

  2. •

    the London Bullion Market

  3. •

    the New York Stock Exchange, or

  4. •

    a market for the time being specified in PAYE regulations

ITEPA 2003, s 702(1)(a); EIM11901

The definition of an exchange is not critical because of the way the legislation is then extended.

An RCA is also ‘anything that is likely (without anything being done by the employee) to give rise to, or to become, a right enabling a

Continue reading the full document
To gain access to additional expert tax guidance, workflow tools, generative tax AI, and tax research, register for a free trial of Tolley+™
TAKE A FREE TRIAL NOW
Powered by Tolley+™
  • 15 Dec 2025 10:10

Home/ Tolley Tax Guidance/ Personal Tax / Additional information supplementary pages

Popular Articles

Trusts and Inheritance Tax

Spouse exemption from inheritance tax

Spouse exemption from inheritance taxArguably, the most important inheritance tax exemption is the spouse exemption from inheritance tax.There is no IHT to pay on gifts from husband to wife and vice versa, or from one civil partner to the other (referred to collectively in this note as ‘spouses’).

14 Jul 2020 13:56 | Produced by Tolley in association with Emma Haley at Boodle Hatfield LLP Read more Read more
Trusts and Inheritance Tax

Holdover relief for disposals by trustees

Holdover relief for disposals by trusteesOverviewWhere a capital gain has been realised on an asset that has been disposed of and that disposal was not for full value (that is not in an arm’s length sale) then holdover relief may be available. This will happen when trustees appoint capital assets

14 Jul 2020 11:54 | Produced by Tolley Read more Read more
Value Added Tax

VAT registration ― artificial separation of business activities (disaggregation)

VAT registration ― artificial separation of business activities (disaggregation)This guidance note should be read in conjunction with the VAT registration ― compulsory guidance note and is relevant to persons established or resident in the UK. Persons that are not established or resident in the UK

14 Jul 2020 13:57 | Produced by Tolley Read more Read more