§ Mrs Currieasked the Chancellor of the Exchequer whether he intends in the next Finance Bill to amend the provisions of section 20 of the Finance Act 1983 on the taxation of scholarships awarded by employers to the children of their employees.
§ Mr. MooreSection 20 of the Finance Act 1983 passed into law without the benefit of a full Committee stage. In the light of further consideration and representations received we intend to propose two sets of amendments in the next Finance Bill. The first set of amendments to take effect from 15 March 1983 (last year's Budget day), will relax the existing transitional rules to provide that in the normal case of scholarship awards made before 15 March 1983 and taken up before 6 April 1984 will remain exempt from tax until 5 April 1989 or the expiry of the scholarship whichever is the sooner.
The purpose of the second set of amendments, which will take effect from 6 April 1984, will be to ensure that the 25 per cent. test in section 20 operates to exclude from charge only those awards where the connection between the award and the parent's employment is purely fortuitous.
The Inland Revenue will be issuing a press notice, copies of which will be placed in the library, to explain the proposed amendments in more detail.