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For a definition of employment-related securities, and other key terms in relation to them, see Simon's Taxes E4.507A.

Income from employment-related securities may be income from readily convertible assets (3.2) and treated as PAYE income (ITEPA 2003, s 698(2)). If the securities are not readily convertible assets, income tax is accountable by the individual through self-assessment.

When are shares readily convertible assets?

Shares are readily convertible assets if:

1. Ìý

   •ÌýÌýÌýÌý they are listed on a recognised stock exchange (but not AIM)

2. Ìý

   •ÌýÌýÌýÌý there is an arrangement in place for them to be sold at the time of acquisition

3. Ìý

   •ÌýÌýÌýÌý the issuing company is not entitled to a corporation tax deduction in respect of the shares awarded (ITEPA 2003, s 702(5A); CTA 2009, s 1008)

The general rule for employment-related securities that are readily convertible assets is that an income tax charge will arise on any difference between the market value of the securities at the time of acquisition and the price paid (ITEPA 2003, s 62). A Class