Tax exemption measures for those who are no longer serving
Under the ELC scheme, most courses of study undertaken by individuals still serving are exempt from taxation, either as income or as a benefit in kind, if they can be justified as ‘work related’ …
In order for Service leavers to benefit fully, HMRC and MoD have worked together to reach an agreement on tax exemption. This means that the Service leaver (or their surviving spouse, civil partner or eligible partner, where appropriate) will not be required to pay income tax on payments received under the ELC or FE-HE schemes. This allows them to draw maximum benefit from the schemes.