EIM30004 - Benefits: scholarships provided for members of the family or household of a director or employee: fortuitous scholarship awards do not give rise to a chargeable benefit

Section 213 ITEPA 2003

There is no chargeable benefit where the connection between the award of thescholarship and the employment is fortuitous. An award of a scholarship is treated asfortuitous if in any year of assessment for the following:

  • the scholarship is provided from a trust fund or under a scheme
  • it is held by a person receiving full time instruction at a university, college, school or other educational establishment
  • it would not be regarded as provided 鈥渂y reason of a person鈥檚 employment鈥� within the ordinary meaning of that phrase as at one of EIM30002 (this means that two and three of EIM30002 are ignored for this purpose)

  • not more than 25 per cent of the payments from that fund or scheme are attributable to scholarships provided by reason of persons鈥� employments. For this purpose the meanings of 鈥渂y reason of the employment鈥� at 1, 2 and 3 of EIM30002 do apply. The meaning of employment is extended to include an office or employment whose earnings are not liable to UK tax, but would be liable if:

  • the employee were resident or ordinarily resident in the United Kingdom
  • all the duties were performed wholly in the United Kingdom