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HMRC internal manual

Employment Income Manual

Benefits: scholarships provided for members of the family or household of a director or employee: general

Sections 211 to 215 ITEPA 2003

The holder of a scholarship is exempt from a charge to income tax on income from thescholarship, see EIM06200.

But a scholarship gives rise to a chargeable benefit where it is provided for a member ofthe family or household of a director or employee by reason of the employment of thatdirector or employee. Fortuitous awards of scholarships are the only exception to thisrule, see EIM30004.

The charge applies to all directors and employees except those in lowerpaid employment. The amount treated as earnings under Section 203 ITEPA 2003 is theexpense incurred in providing the scholarship (see EIM21102).

Family or household’ has the meaning ascribed to it at EIM20504 andscholarship that at EIM06203.