Income and Corporation Taxes Act 1988

165 Scholarships. U.K.

(1) M1 Nothing in section 331 shall be construed as conferring on any person other than the person holding the scholarship in question any exemption from the charge to tax under section 154.

(2) M2 For the purposes of this Chapter, any scholarship provided for a member of a person’s family or household shall, without prejudice to any other provision of this Chapter, be taken to have been provided by reason of that person’s employment if it is provided under arrangements entered into by, or by any person connected with, his employer (whether or not those arrangements require the employer or connected person to contribute directly or indirectly to the cost of providing the scholarship).

(3) M3 Section 154 does not apply to a benefit consisting in a payment in respect of a scholarship—

(a) provided from a trust fund or under a scheme; and

(b) held by a person receiving full-time instruction at a university, college, school or other educational establishment; and

(c) which would not be regarded, for the purposes of this Chapter, as provided by reason of a person’s employment were subsection (2) above and section 168(3) to be disregarded;

if, in the year in which the payment is made, not more than 25 per cent. of the total amount of the payments made from that fund, or under that scheme, in respect of scholarships held as mentioned in paragraph (b) above is attributable to relevant scholarships.

(4) M4 This section does not have effect in relation to any payment if—

(a) it is made in respect of a scholarship awarded before 15th March 1983, and

(b) the first payment in respect of the scholarship was made before 6th April 1984; and

(c) in relation to payments made after 5th April 1989, the person holding the scholarship is receiving full-time instruction at the university, college, school or other educational establishment at which he was receiving such instruction on—

(i) 15th March 1983, in a case where the first payment in respect of the scholarship was made before that date; or

(ii) the date on which the first such payment was made, in any other case.

(5) M5 For the purposes of subsection (4)(c) above, a payment made before 6th April 1989 in respect of any period beginning on or after that date shall be treated as made at the beginning of that period.

(6) M6 In this section—

(a) “scholarship” includes an exhibition, bursary or other similar educational endowment;

(b) “relevant scholarship” means a scholarship which is provided by reason of a person’s employment (whether or not that employment is [F1 employment to which this Chapter applies]); and for the purposes of this definition “employment” includes an office or employment whose emoluments do not fall to be assessed under Schedule E but would fall to be so assessed if the employee were resident, and ordinarily resident, and all the duties of the employment were performed wholly, in the United Kingdom;

and section 839 applies for the purposes of this section.

Textual Amendments

F1 1989 s.53(2)(b).Previously

“director's or higher-paid employment”.

Marginal Citations

M1 Source—1976 s.62A(1); 1983 s.20(1)

M2 Source—1976 s.62A(2); 1983 s.20(1)

M3 Source—1976 s.62A(3); 1983 s.20(1); 1984 s.31(1)

M4 Source—1983 s.20(2), (3); 1984 s.31(3)

M5 Source—1983 s.20(3A); 1984 s.31(3)

M6 Source—1976 s.62A(4); 1983 s.20(1); 1984 s.31(2)