Income Tax (Earnings and Pensions) Act 2003 section 32

Taxable benefits: residual liability to charge [ITEPA 2003 Sch 7 para 32]

Section 32 of Schedule 7 provides transitional rules for Chapter 10 of Part 3 (the residual benefits-in-kind charge), covering how historic benefit costs carry forward and protecting certain pre-1983 scholarship awards from the scholarship anti-avoidance rules.

• When calculating the taxable value of a transferred asset under section 206, the historic cost of a benefit previously determined under the old ICTA rules (section 156(5)) counts alongside costs calculated under the current section 205.
• The scholarship anti-avoidance provisions in sections 212, 213 and 215 do not apply to payments under scholarships awarded before 15 March 1983 where the first payment was made before 6 April 1984.
• For payments made after 5 April 1989 under such protected scholarships, the exemption only continues if the scholar is still in full-time education at the same institution they attended on 15 March 1983 (or the date of the first payment, if later).
• Any payment made before 6 April 1989 that relates to a period starting on or after that date is treated as made at the beginning of that later period for the purposes of applying these transitional rules.

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