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

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

Corporation Tax

What are connected companies for loan relationship purposes ― practical approach

What are connected companies for loan relationship purposes ― practical approachBrief overview of the rulesThe loan relationships legislation applies to any ‘money debt’ arising from the lending of money entered into by a company, either as a lender or borrower. The rules are contained in CTA 2009,

20 Apr 2021 16:00 | Produced by Tolley Read more Read more
Corporation Tax

Research and development expenditure credit (RDEC)

Research and development expenditure credit (RDEC)This guidance note provides information on how research and development expenditure credits (RDEC) are calculated and utilised. The Qualifying expenditure for R&D tax relief guidance note provides information on what expenditure qualifies for

14 Jul 2020 13:24 | Produced by Tolley in association with Will Sweeney Read more Read more
Corporation Tax

Terminal trading loss relief

Terminal trading loss reliefTerminal loss relief for trade losses in the final 12 monthsTrading losses incurred by a company in the final 12 months leading up to the discontinuance of trade may be carried back for up to three years from the period beginning immediately before that 12-month period.

14 Jul 2020 13:49 | Produced by Tolley Read more Read more