Question:
Scholarships
Answer:
Recent changes are outlined below:
July 1, 2022
- Loss carry back for eligible companies extended to cover 2023 income year.
- Professional firm profits diverted to the professional's spouse or other associates to be reviewed under new Tax Office guidance.
- Corporate collective investment vehicle legislative regime introduced.
- Temporary full expensing of depreciating assets extended to include 2023 income year.
- Depreciable assets of a company joining a tax consolidation group have tax costs setting rules modified for assets depreciated under temporary full expensing rules.
December 9, 2021
- Reduced Pandemic leave disaster payment of $750 per week made available through to 30 June 2022.
August 5, 2021
- COVID-19 Disaster Payments are non-assessable non-exempt income in 2021 income year and later. Payments phasing out as vaccination rates increase.
July 1, 2021
- New Investment Engagement Service launched for businesses planning significant new investments in Australia.
- Tax Office small business independent review service made permanent for businesses with turnover < $10m, for income tax, GST, exercise, luxury car tax, wine equalisation tax and fuel tax credits. Requested before amended assessment issued.
- Small business income tax offset for individuals increased to provide a reduction of 16% for a tax payable up to $1,000.
- Self-managed superannuation funds can now have six members, increased from four members previously.
July 1, 2021
- Some COVID -19 state and territory business grants received by small and medium enterprises are non-assessable, non-exempt income for 2021 and 2022 income years.
- Certain state, territory and local government financial support for individuals and businesses suffering COVID-19 impacts made exempt where businesses have turnover less than $50 million and only in eligible programs.
March 31, 2021
- JobKeeper payments scheme ended.
October 5, 2020
- Boosting apprenticeship commencements subsidy (up to 50% of apprentice's wages) is assessable income.
June 4, 2020
- Homebuilder grant for new home or substantial renovation construction is not subject to income tax.
April 1, 2020
- COVID-19 cash flow boost payments are not subject to income tax
Question: In prior years my client, a medical doctor, received salary income and claimed work related self education and other deductions. During last year she had no salary income but received a scholarship to undertake research and a Ph.D. degree.
I understand scholarship income is exempt. Can she still claim work related self-education and other expenses?
Answer: There is a general exemption for scholarships received by a student (of any age) receiving full-time education at a school, college or university. There are a number of exceptions:
– Payments to a student who undertakes to remain, or become an employee of the payer;
– Payment is not provided principally for educational purposes (e.g. payments received in the capacity of an employee or company executive);
– Remuneration received by a trainee for services rendered;
– Payments which do not qualify as scholarships, bursaries or other educational allowances or assistance; and
– Payments for education at an institution which is not a school, college or university.
If your client’s income is exempt, she will not be entitled to deductions for the work-related expenses because Section 8-1 of the 97 Tax Act specifically xcludes deductions incurred in relation to gaining or producing exempt income or non-assessable non-exempt income.
