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Regulation 1(2) of the Social Security (Contributions) Regulations 2001

A payment by way of an asset which is a readily convertible asset is earnings liable for Class 1 NICs. Readily convertible assets have the meaning given in section 702 of the Income Tax (Earnings and Pensions) Act 2003. »Ê¹ÚÌåÓýappre are nine possibilities to consider when determining whether an asset is a readily convertible asset and only one needs to be satisfied. »Ê¹ÚÌåÓýappse are:

(a) an asset capable of being sold or otherwise realised on a recognised investment exchange;

(b) an asset capable of being sold or otherwise on the London Bullion Market:

(c) an asset capable of being sold or otherwise realised on the New York Stock Exchange;

(d) an asset capable of being sold or otherwise realised on a market for the time being specified in PAYE regulations;

(e) an asset consisting in the rights of an assignee, or any other rights, in respect of a money debt that is, or may become, due to the employee or any other person;

(f) an asset consisting in property that is subject to a warehousing regime, of any right in respect of property so subject;

(g) an asset consisting in anything that is likely (without anything being done by the employee) to give rise to, or to become, a right enabling a person to obtain an amount or total amount of money that is similar to the expense incurred in the provision of that asset;

(h) an asset for which trading arrangements are in existence, or likely to come into existence in accordance with any arrangements or another description existing when the asset is provided;

(i) an asset for which trading arrangements are in existence, or likely to come into existence, in accordance with any understanding when the asset is provided.

In addition to the above, since 1 September 2003 an asset consisting in securities which is not a readily convertible asset under (a) to (i) is treated as a readily convertible asset unless the securities are shares which are corporation tax deductible.

EIM11900 provides further guidance on readily convertible assets.