Readily convertible assets

Produced by a Tolley Personal Tax expert

Personal Tax

Guidance

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:

•
a recognised investment exchange (within the meaning of the Financial Services and Markets Act 2000)
•
the London Bullion Market
•
the New York Stock Exchange, or
•
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

Popular Articles

Owner-Managed Businesses

Tax implications of administration and liquidation

Tax implications of administration and liquidationThis guidance considers the tax implications of a company going into administration or liquidation.Introduction to company administration and liquidationCompany going into administrationA company which is in financial difficulty may go into

14 Jul 2020 15:29 | Produced by Tolley Read more

Employment Tax

Fuel-related payments / mileage payments

Fuel-related payments / mileage paymentsIntroductionMost employers will make payments to employees in relation to business travel. Among the most common payments in relation to business travel are fuel and mileage payments. If an employer does not reimburse these amounts, then the employee will be

14 Jul 2020 11:46 | Produced by Tolley in association with Philip Rutherford Read more

Trusts and Inheritance Tax

Bare trusts ― income tax and CGT

Bare trusts ― income tax and CGTThis guidance note explains how trustees of bare trusts are treated for income tax and capital gains purposes. Although a bare trust is, in equity, a type of trust, for both income tax and capital gains tax purposes its existence is transparent. This means that no tax

14 Jul 2020 15:34 | Produced by Tolley Read more

Readily convertible assets

Readily convertible assets