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HMRC internal manual

Employment Income Manual

HM Revenue & Customs
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Restrictive undertakings: non-cash consideration

Section 226 and Sections 696 to 702 ITEPA 2003

Non-cash consideration may be given to an employee for entering into a restrictive covenant. The legislation applies as if a cash sum equal to the value of the asset had been paid. See example EIM03625.

Assets transferred on or after 25 May 1994 are likely to be caught by the legislation at Section 696 to 702 ITEPA 2003. Tradable assets or readily convertible assets must be subjected to PAYE by the provider. See EIM11800 onwards.