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Benefits Code II: Not Low Paid Employees |
35 |
directors, or the company is non-profit-making or a charity.186 |
17A.4.8 Scholarships |
TA 1988, section 331, which is unaffected by ITEPA, provides a general exemption from income tax for scholarship income. Section 215, ex 165 restricts this exemption (from section 154) to the person holding the scholarship187—reversing the decision of the House of Lords in Wicks v Firth.188 As a result of sections 212 and 215, a director or employee earning £8,500 p.a. or more receives a taxable benefit if a scholarship is provided to a member of his family or household under arrangements made by his employer or a person connected with E. The charge is on the amount of the payment from the fund to the person holding the scholarship.189 The charge does not apply if the award is by an individual employer in the course of the normal domestic family or personal relationships.190 |
17A.4.8.1 Exception |
No taxable benefit arises if the scholarship is awarded under a trust or scheme to a person receiving full-time education, and not more than 25% of the payments made under the trust in that year would have been taxable were it not for this provision191 (ie the payments would have been exempt under section 331 but for ITEPA section 212). |