Part 3

Employment income: earnings and benefits etc. treated as earnings
Chapter 10

Taxable benefits: residual liability to charge

Special rules for scholarships

Exception for certain scholarships under trusts or schemes
213
1
This Chapter does not apply to an employment-related benefit consisting in the provision of a scholarship if conditions A, B, C and D are met.
2
Condition A is that the scholarship would not be regarded as provided by reason of the employment if section 201(3) and section 212 were disregarded.
3
Condition B is that the holder of the scholarship is a full-time student.
4
Condition C is that the scholarship is provided from a trust fund or under a scheme.
5
Condition D is that, in the tax year in which the scholarship is provided, not more than 25% of the total amount of relevant payments is attributable to scholarships provided by reason of a person’s employment.
6
For the purposes of conditions B and D “full-time student” means a person who is in full-time education at a university, college, school or other educational establishment.
7
For the purposes of condition D—
- “employment” includes any employment within the meaning of the employment income Parts (see section 4), whether or not it is a taxable employment under Part 2;
- “relevant payments” means the payments made from the fund or scheme mentioned in condition C in respect of scholarships held by full-time students.
Pt. 3 Ch. 10 excluded (with effect in accordance with reg. 1(2) of the amending S.I.) by The Income Tax (Exemption of Minor Benefits) (Coronavirus) Regulations 2020 (S.I. 2020/1293), regs. 1(2), 2 (with reg. 1(2))