Income tax on personal research fellowships

[mmm]

Are personal post-doctoral research fellowships taxable? The facts in this case are that there is no employment contract, the income is not payment for research services, and there is no deliverable "product" to be produced for the income, excepting one final progress report. I have read EIM06250.

I have also read BIM65151. Here, it seems Case VI liability can be ruled out, because the facts are that "the paying body does not receive significant services [so] there cannot be Case VI liability".

Case II seems to be a possibility though: "If the individual has a vocation as a researcher, Case II is a possibility. The situation envisaged is that of a student who has a series of research awards spread over a number of years. Such cases will be rare." But what counts as a "vocation as a researcher"? In this case, the individual has recently completed a doctorate, and has had two post-doctoral research appointments, but is on a career path to becoming a university lecturer (which does involve a significant research component of course).

Alternatively, considering the paragraph: "If the award can be viewed as an annual payment then there may be liability under Case III. It would be necessary to show that the payments were capable of being annually recurring, paid under a legal obligation and pure income profit in the hands of the recipient, before such liability could be attached." The facts are that the individual is paid a stipend as if it were a salary, through the usual payroll. But the payment is effectively a lump sum, disbursed through the hosting university.

Advice much appreciated.

[danielmgore]

Hi,
Did you ever find the answer to this question?
I am in the same situation.
Many thanks.
Dan

[King_Maker]

My initial response would be that they are taxable - but it could depend on the nature of the contract.

[rosannr]

A new client has returned from the US where he was in receipt of an award of a Fellowship paid without any US tax. He was to undertake study or research in a field related to political science.( He is a Professor in Political Law at Queens University Belfast.). The objective of the Fellowship is to provide scholars with an opportunity to spend time away from regular duties to concentrate on studies. But he was expected to teach one course and help with the College programme.

The letter of offer describes the Fellowship as a salary, to be paid monthly., , with funds for travel and research, whereas my client had assumed that the award would be a lump sum, for general expense During his 6 months in the US, he continued to receive his UK salary, on which UIK tax was paid. I have been advised to submit details to HMRC Technical Division, but am not hopeful, and will need a reply before 31 January - the tax involved is over £5000. So I would appreciate it if any of the authors of the previous enquiries would b able to confirm the UK tax position.

[maths]

If the source of the monies is the USA and your client during the USA period was not UK resident then presumably no UK tax charge?

No US tax charge because of Article 20A of the UK/US DTA?

[rosannr]

My client was only in US for 6 months - so still resident UK - in receipt of UK salaries, Had no intention of staying longer although his visa was for 2 years.

[maths]

Looks to me that it's taxable.

[Energy]

Hi
I have the same problem and would appreciate if anybody can answer my question.
I am UK resident (also permanent home UK) and have received a postdoctoral fellowship from Switzerland to do research in the UK for 2 years. It is mentioned clearly in the contract that the fellowship is tax free and is for covering the cost of living rather than salary. I receive the amonth of my Fellowship award anuually.
My question is that should I pay tax in the UK?

[susan90]

Hi Energy,

have you managed to find an answer to your question? I am now in an almost identical situation (Swiss fellowship to UK), so it would be great if you could share your experience.
Thank you!