Trusts for particular purposes: employment-related trusts - educational trusts
An employer may set up an educational trust (sometimes known as a scholarship trust). This could provide scholarships for members of the families or households of employees. It is normally a discretionary capital settlement.
Trustees should consider the following
- Has the trust received income or acquired chargeable assets?
- If not, is it likely to do so in the future?
Answer to both questions is no
If the answer is no, to both questions, the trustees do not need to complete annual returns but should be mindful of their obligation to notify any future chargeability to tax (TMA70/ Section 7).
Answer to a question is yes
If the answer is yes to either questionthen the educational trust will be treated as a new employee benefit trust (TSEM5050).