Scholarships, exhibitions, bursaries etc held by a person receiving full-time instruction at university, technical college or similar educational establishment are exempt from income tax by the Income Tax (Trading and Other Income) Act 2005 (s. 776). The conditions under which the exemption operates are set out in Statement of Practice 4/86.

Among the conditions is a requirement that payments, including lodging, subsistence and travelling allowances, but excluding any tuition fees payable by the employee to the university etc, must not exceed £;15,000 for the 2005/06 academic year.

HMRC has confirmed that this £;15,000 threshold will also apply for the 2006/07 academic year, starting September 2006.

...back to 22 June 2006

Sources:
Review of the SP 4/86 Financial Limits for the 2006-07 academic year
Statements of Practice

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