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HMRC internal manual

Employment Income Manual

From
HM Revenue & Customs
Updated
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PAYE: meaning of readily convertible assets: property subject to a warehousing regime

Section 702(1)(b)(ii) ITEPA 2003Before 6 April 1998 several PAYE avoidance schemes involved an employer providing an employee with an asset that was held:

  • in storage, or
  • in a special warehouse subject to a warehousing regime, or
  • under a similar arrangement in any state within the European Economic Area. A common scenario involved an asset held in a special warehouse regulated by Customs and Excise, or a similar authority. While in this warehouse the owner does not have to pay customs duties or VAT, the assets are sometimes referred to as held in bond. Awards of oriental carpets are a common example of schemes used in this way, see example

EIM11924.

Section 702(1)(b)(ii) puts it beyond doubt that the employer should operate PAYE at the time such assets are awarded to an employee.