NIM06869 - Readily convertible assets from 1 September 2003

Regulation 1(2), SSCR 2001

A ''readily convertible asset'' has the meaning assigned in s702 ITEPA 2003 and this defines a ''readily convertible asset'' as an asset which -

• is capable of being sold on a recognised investment exchange or the London Bullion Market. For example, stocks, shares and other financial instruments, gold bullion and other precious metals and so on: or
• is capable of being sold on a market specified in PAYE regulations - the New York Stock Exchange is the only specified market for this purpose; or
• is a right over a money debt. For example, trade debts assigned by an employer to an employee; or
• is subject to a fiscal warehousing regime, such as a bonded warehouse. For example, oriental carpets stored in 'bond'; or
• gives rise to a right to enable an employee to obtain money. For example, an interest in a trust which comes to an end shortly after being assigned to an employee, resulting in an automatic right to cash; or
• is subject to trading arrangements, either at the time of provision or likely to come into existence in future under an arrangement or understanding in place when the asset is provided. For example, jewellery which can be sold either under an arrangement existing at the time of provision or under future arrangements for which steps have been taken at the time the jewellery is provided; or
• is an asset consisting in securities which are not shares that are corporation tax deductible.

This means that all shares and other securities are readily convertible assets under the above definitions unless they are non-readily convertible assets and they are corporation tax deductible (see NIM06870).