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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 the scholarship, see EIM06200.

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

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

Family or ‘household’ has the meaning ascribed to it at EIM20504 and scholarship that at EIM06203.