Part 11Pay As You Earn

Chapter 4PAYE: special types of income

Supplemental

701Meaning of “asset”

1

In this Chapter “asset” includes any property and in particular any investment of a kind specified in Part 3 of the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 (S.I. 2001/544).

This is subject to subsection (2).

2

In this Chapter “asset” does not include—

a

any payment actually made of, or on account of, PAYE income;

b

subject to section 700(6), any cash voucher, non-cash voucher or credit-token;

c

the following—

i

any shares acquired by the employee (whether or not as a result of the exercise of a right to acquire shares) under a scheme approved under Schedule 3 (approved SAYE option schemes) or 4 (approved CSOP schemes), or Schedule 9 to ICTA (approved profit sharing schemes),

ii

any right over or interest in shares obtained or acquired by the employee under such a scheme, or

iii

any shares acquired by the employee as the result of the exercise of a right over shares obtained before 27th November 1996,

if the shares in question form part of the ordinary share capital of a company falling within subsection (3); or

d

any description of property for the time being excluded from the scope of this section by PAYE regulations.

3

A company falls within this subsection if it—

a

is the employer (“the employer company”);

b

has control of the employer company; or

c

either is, or has control of, a company which is a member of a consortium owning either the employer company or a company having control of the employer company.

4

In this section “share” includes stock.

5

For the purposes of this section a company is a member of a consortium owning another company if it is one of a number of companies which between them beneficially own not less than 75% of the other company’s ordinary share capital and each of which beneficially owns not less than 5% of that capital.