Before the introduction of section 203F to L ICTA 1988 on 25 May 1994 (now Part 11 Chapter 4 ITEPA 2003), PAYE was due on an award of assets only where an employee was legally entitled to remuneration of a monetary amount.

For directors, legal entitlement is usually established by reference to the company's memorandum and articles of association (particularly Article 82 Table A of the 1985 Companies Regulations), together with the minutes recording the resolution adopted at the company meeting at which the remuneration was awarded.

In the case of employees who are not directors, entitlement must be established from a contract of employment (see EIM42300).

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