Taxes Consolidation Act 1997 Schedule 32 paragraph 2

Income Tax: Exemption from Tax of Income from Certain Scholarships

Schedule 32 paragraph 2 provided a transitional rule for scholarship income paid before 6 April 1998 under scholarships awarded before 26 March 1997, applying section 193 in a broader form that removed the restrictions on employer-sponsored schemes.

• The paragraph applied where a payment of scholarship income was made before 6 April 1998 in respect of a scholarship that had been awarded before 26 March 1997.
• Section 193 applied in modified form: the definitions of "relevant body" and "relevant scholarship" and paragraph (b) of subsection (1) were deleted, so the distinction between employer-funded and other scholarships did not arise.
• Subsections (3) and (4) of section 193 were also deleted, removing the 25 per cent threshold test that would otherwise have restricted the exemption where employer-funded scholarships exceeded 25 per cent of total payments from the trust fund or scheme in a tax year.
• The practical effect was that all scholarship income falling within this transitional window was exempt from income tax without regard to whether the scholarship was funded by the recipient's employer.

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