Finian McGrath
Question:177 Mr. F. McGrath asked the Minister for Finance if there is anything in the Finance Act which, from a taxation position, could affect company educational funds. [18892/02]
Written Answers. - Tax Allowances.
The position is that section 193 of the Taxes Consolidation Act, 1997, exempts from income tax certain scholarship payments received by individuals receiving full-time instruction at a university, col lege, school or other educational establishment. The exemption applies to the person holding the scholarship. Where a scholarship is provided by an employer to an employee or director, or to the spouse, family, dependants or servants of such employee or director, the payment will be exempt from income tax provided certain conditions are satisfied. The conditions are that: the income is provided from a trust fund or under a scheme; the scholarship is held by a person receiving full-time instruction at a university, college, school or other educational establishment; at least 75% of the total payments made from the fund in any one tax year must be made to persons not connected with the employer who provides the funding for the scholarship.
If the scholarship does not fulfil these conditions, a charge to income tax will arise on the employee-director.