Income Tax (Earnings and Pensions) Act 2003 section 702

Meaning of "readily convertible asset"

Section 702 defines what counts as a "readily convertible asset" for the purposes of the PAYE rules on non-cash earnings, covering assets tradable on recognised exchanges, assets linked to money debts or warehoused property, and assets for which trading arrangements exist or are anticipated.

• An asset is readily convertible if it can be sold on a recognised investment exchange, the London Bullion Market, the New York Stock Exchange, or any other market specified in PAYE regulations.
• Certain rights and property also qualify, including rights to money debts owed to the employer, warehoused property, and anything likely to give rise to a right to obtain money broadly equivalent to the cost of providing the asset.
• An asset is readily convertible if trading arrangements already exist, or are likely to come into existence, that would enable the recipient or a member of their family or household to realise a sum broadly equivalent to the cost of providing the asset.
• Securities provided as employment-related earnings are automatically treated as readily convertible assets unless they are shares in respect of which the employing company is entitled to corporation tax relief for employee share acquisition under Part 12 of the Corporation Tax Act 2009.