The term ‘readily convertible assets’ (‘RCAs’) is defined by ITEPA 2003, s. 702 and, in essence, it refers to any asset which can be easily converted into cash. This includes assets that can be used to realise a cash sum (e.g. if the asset can be used as collateral to secure a loan or advance).

The legislation treats securities as being convertible into cash if they are listed on recognised exchanges or if ‘trading arrangements’ exist or are likely to come into existence at a point in the future. Examples of trading arrangements include listing on a non-recognised exchange, for example AIM, or the company being in the process of acquisition.

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