Shares awarded to employees in "cash-box" companies have been held by the Upper Tribunal (Tax and Chancery Chamber) to be readily convertible assets (RCAs) and the tax payable should therefore have been withheld by the employing company through PAYE – Aberdeen Asset Management plc v HMRC [2012] UKUT 42 (TCC).

Aberdeen Asset Management plc (AAM) conceded that income tax and NICs were due, but disagreed about whether AAM was liable for the income tax under PAYE, or the employees were liable under self-assessment.

The tribunal held that although the transfer of shares was not a "payment of money" within the meaning of sections 203 and 203A of Income and Corporation Taxes Act 1988 (the relevant tax legislation at the time), the shares were RCAs within section 203F of ICTA (now section 702(2) of the Income Tax (Earnings and Pensions) Act 2003). The employee held 100% of the shares in the relevant cash-box company which meant that "arrangements" existed:

"the effect of which in relation to that to enable that person... to obtain an amount or total amount of money that is, or is likely to be similar to the expense incurred in the provision of that asset".

The tribunal's decision was based on that fact that (i) each company held only cash assets and had no liabilities and (ii) the shareholder was able to unilaterally exercise company law procedures (such as payment of a dividend) and as a result, was entitled to obtain cash in an amount similar to the expense incurred by AAM in providing the shares.

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