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Income Tax (Earnings and Pensions) Act 2003

Section 697: Enhancing the value of an asset

2828.This section treats as the provision of PAYE income in the form of a readily convertible asset anything which enhances the value of an asset which an employee already has if the asset (as enhanced) is a readily convertible asset. It derives from section 203FA of ICTA and regulations.

2829.Subsection (1) sets out the circumstances in which this section applies.

2830.Subsection (2) then provides for section 696 to apply as if the income were provided in the form of a readily convertible asset. Then (subject to the details of section 696) it will be a “notional payment” on which PAYE must be operated.

2831.Subsection (4) derives from paragraph 3B of the Income Tax (Employments) (Notional Payments) Regulations 1994, SI 1994 No 1212. It excludes from this section things which are excluded from readily convertible assets: see section 701(2)(c).

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