Scholarships are exempt from tax where they provide for full-time education of the recipient, and where no service is rendered (present or future) by the recipient to the funds provider. In this context `service' includes the provision of information.
The following guidelines have been developed to ensure that the tax-exempt status of scholarships is preserved:
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Students should undertake academic work limited to six hours weekly.
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Reporting to the funds provider should be undertaken by supervisors or department heads, not by the students.
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Students should not be placed in situations in which they seem to be acting as contract research workers. Students should have no employment obligations to the funds provider.
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Students should not be contractually involved with the funds provider.
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Ideally, funding arrangements for scholarships should only include students' stipends plus allowances for limited working and travel expenses. Major projects should be set up separately from scholarships wherever possible.
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Students should be awarded scholarships according to the University's normal selection procedures.
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Specific research topics should be determined by students in conjunction with their academic supervisors.