SE12011 - PAYE avoidance: definition of tradeable assets before 6 April 1998

Section 203F(2) ICTA 1988

Definition of tradeable assets

Before 6 April 1998, where an employee was provided with non-cash remuneration in the form of a “tradeable asset”, the employer was obliged to operate PAYE under Section 203F(1) ICTA1988.

A tradeable asset was defined as:

• either an asset capable of being sold, or otherwise turned to cash, on a recognised investment exchange, such as the London Stock Exchange or NASDAQ (North American Securities and Derivatives exchange), or on the London Bullion Market
• or an asset capable of sale on market specified for this purpose in PAYE regulations
• or any asset for which trading arrangements existed when the asset was provided.

No market was specified in PAYE regulations for this purpose before 6 April 1998 and so, in practice, the second definition never applied to tradeable assets. Regulations did come into force under these powers in August 1998 (see SE11805).

Whether an asset was capable of sale on a recognised investment exchange was a matter of fact and so the only definition of tradeable asset open to different interpretation was that based on the existence of trading arrangements (see SE12012).