5 May 2004 External T.I. 2004-0072511E5 - Foreign Scholarship, Tuition

Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ARC.

Principal Issues: Is a scholarship received from the British Council, by a Canadian resident, taxable?

Position: Yes

Reasons: Legislation.

XXXXXXXXXX 2004-007251
Shaun Harkin, CMA
May 5, 2004

Dear XXXXXXXXXX:

Re: Technical Interpretation Request: Scholarships and Tuition

We are writing in reply to your facsimile of April 21, 2004, wherein you requested our comments as to the tax treatment of the scholarship you received from the British Council and the tuition you paid to attend a university outside of Canada. Our comments are based on the assumption that you are a Canadian resident.

You must include in income the amount, in excess of what is referred to as the scholarship exemption, that you received as a scholarship from the British Council. In your particular case the scholarship exemption would be $500. The net amount is included in income in the year received and is reported on line 130 of the T1 General Income Tax and Benefit Return.

Generally, an educational institution located in a country outside Canada is presumed to qualify for the tuition tax credit if it is recognized by an accrediting body (that is nationally accepted in that country) as being an educational institution which confers degrees at least at the bachelor or equivalent level. The tuition tax credit for both tuition fees paid to educational institutions in and outside Canada is claimed on line 320 of Schedule 11.

We have enclosed copies of IT-75R4, Scholarships, Fellowships, Bursaries, Prizes, Research Grants and Financial Assistance, and IT-516R2, Tuition Tax Credit, for your information.

The foregoing comments represent our general views with respect to the subject matter. As indicated in paragraph 22 of Information Circular 70-6R5, the above comments do not constitute an income tax ruling and accordingly are not binding on the Canada Revenue Agency. Our practice is to make this disclaimer in all instances in which we provide an opinion.

We trust the above comments are of assistance.

Yours truly,

Wayne Antle, CGA
for Director
Business and Partnerships Division
Income Tax Rulings Directorate

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