EIM06245 - Employment income: scholarship income: directors and employees

Section 215 ITEPA 2003

The general exemption from income tax for scholarship income provided by Section 776 IT(TOI)A 2005 applies only to the scholarship holder (see EIM06205 onwards). The provision of a scholarship for the son or daughter of a director or employee will usually be treated as the parent’s earnings under the benefits code (see EIM30000 onwards). Section 215 ITEPA 2003 prevents the scholarship exemption at Section 776 from precluding such a charge.

For tax years before 2016/17, there is an exclusion for those in lower paid employment (see EIM20100). That exclusion has continuing effect for clergy (see EIM60066).