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Grant received for further study
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2016/01/27 at 12:24:54 PM GMT
Posts: 2
Grant received for further study

Hi All

 

A client of mine (a medical doctor) has received a grant for an amount of R800 000 from an institution to do his PhD at Wits in a specific field. I think that this falls under exempt income and is the same as a scholarship or bursary. It specifically states that it is a "grant". He is currently in process of resigning his current position and will start full time study within the next two months.

 

Am I correct in my thinking?



2016/01/27 at 01:03:26 PM GMT
Posts: 1
Grants further studies
Section 10(1)(q) exempts a bona fide scholarship granted to study at a recognized educational or research institution. "If an employer operates a bursary scheme which is open to the general public and is not in any way limited to employees or relatives of employees of a specific employer, organisation or other institution, the bursary granted will qualify for the exemption under this section."
 (ea 265)

ea, Venter. Student's Approach to Inc Tax: Natural Persons 2015. LexisNexis SA. VitalBook file.

The citation provided is a guideline. Please check each citation for accuracy before use.

"Exclusions
• A scholarship or bursary will, however, be a taxable benefit if it has been granted by an employer to an employee or to a relative of such employee to be able or assist the employee, unless the employee agrees to reimburse the employer for any scholarship or bursary granted to that employee if that employee fails to complete his studies for reasons other than death, ill-health or injury.
• Scholarships or bursaries by an employer to a relative of an employee will only be exempt if the employee’s annual remuneration does not exceed R250 000 and the exempt portion will be limited to R10 000 per relative per year for a qualification from National Qualifications Framework (NQF) level from 1 up to and including 4 (that is up to grade 12) has been allocated and R30 000 for a qualification to which an NQF level from 5 up to and including 10.
• It is important to note that where an employer rewards an employee for obtaining a qualification, the successful completion of a study course or reimbursing the employee for study expenses, such reward or reimbursement of study expenses will represent a taxable benefit."
(ea 266)

ea, Venter. Student's Approach to Inc Tax: Natural Persons 2015. LexisNexis SA. VitalBook file.

The citation provided is a guideline. Please check each citation for accuracy before use.


Last edited 27 January 2016
2016/01/28 at 02:45:24 PM GMT
Posts: 56
SARS I/Note 66 may also be helpful in assisting you,particularly paragraph 4 although you also need to be fully conversant with the entire Note.


2016/08/24 at 12:14:07 PM GMT
Posts: 1
Hi guys. Just on the topic of Section 10(q)

I have read through this section quite a few times and looked through google search but cannot seem to find a definite answer on the following:

If a company employees Maggie (Directors daughter-in-law). She earns R 150k per annum. She has three children who are in Grades 1, 4 and 7. Schooling is R 15k per child per annum. The company gives a bursary/scholorship with no repayments, of R 10k for each child per annum,

Can the company

1. Deduct the R 30k for the year under scholarships and bursaries, and therefore reduce their tax liability?

Can Maggie

in effect, have received R 180k, but only have been taxed on R 150k.

Would you even need to specify this on her IRP5, or must the company documentation just be in place eg School Invoice?

 



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