Income from a scholarship is exempt from a tax charge in the scholar's hands.

Scholarships awarded to a student by reason of the employment of one of his or her parents will normally give rise to a tax charge on the parent unless the parent is in an excluded employment. For guidance on excluded employments look at EIM20007.

The employer will also be liable for Class 1A NICs on the taxable benefit.

The word scholarship is defined as including an exhibition, bursary or other similar educational endowment.

There is no charge on fortuitous awards.

For more detailed guidance on scholarships look at EIM06205 onwards.

Level 3 Table of Contents