Income Tax (Earnings and Pensions) Act 2003 section 513

Capital receipts: payments by trustees to employer company

Section 513 deals with the process by which capital receipts received by Share Incentive Plan trustees are passed to participants via the employer company, ensuring that PAYE is properly applied.

• When SIP trustees receive money that forms part of a capital receipt counting as a participant's employment income, they must pay an equivalent amount to the employer company.
• The employer company must then pass this amount on to the participant, making a PAYE deduction before doing so.
• The employer company is the company employing the participant in relevant employment at the time the trustees receive the money, or if the participant has left, the last company that employed them in relevant employment — provided that company is subject to PAYE regulations at that time.
• This section is subject to section 514, which deals with situations where the trustees themselves are required to make deductions from capital receipts.