Documents
Resources
Learning Center
Upload
Plans & pricing Sign in
Sign Out

CHARITABLE TRUSTS

VIEWS: 167 PAGES: 11

									CHARITABLE
TRUSTS
Beneficial to the Community
Advantages
   Perpetuity
   The rules are not so strictly applied – the gift can be handed over to
    another charity in perpetuity Christ’s Hospital v Grainger 1849

   Certainty
   If the donor has given to ‘charity’ it doesn’t have to be named
   Courts will decide if needs be Moggridge v Thackwell 1803

   Tax
   No tax on income/ inheritance/capital gains
   Plus tax rebate on gifts of £250+ s25 Finance Act 1990
Charity?
   A charitable trust must be of a ‘charitable nature’ and ‘sufficient public benefit’

   No legal definition IRC v Baddeley 1955

   The guide is taken from The Charitable Uses Act 1601 – [though repealed by the
    Charities Act 1960]

   Best summary – Lord McNaughten in Commissioners of Income Tax v Pemsel 1891

   Trusts for relief of poverty
   Trusts for advancement of religion
   Trusts for advancement of education
   Any other purpose beneficial to the community
Poverty
   Re Coulhurst 1951 – doesn’t mean destitution

   Originally [1601] – ‘aged, impotent [disabled] and poor’
   Now – not all needed – only one!

   Re Lewis 1955 - £100 to 10 blind boys and 10 blind girls in Tottenham [no need to
    establish poor AND blind]
   BUT must be for ‘relief’ - Joseph Rowntree v AG 1983 – not valid for ‘aged
    millionaires of Mayfair’

   Re Sanders 1954 – NOT charitable where the ‘working classes’ are actually
    financially stable
   Re Njyazi 1978 – borderline is ok – working men’s hostel in Famagusta
   Re Gwyon 1930 – a gift to provide underpants for the boys in Farnham failed – the
    wealthy may also benefit [but note motive!]
Education
   1601 – formal only – not now

   Must be ‘instruction or improvement’
   Incorporated Council of Law Reporting v AG 1972 – publication was
    beneficial – essential for study of law
   Re Shaw 1957 – GBS ‘trust’ for the study of a 40 letter alphabet – not valid
   Royal Choral Society v IRC 1943 - Choral singing - valid
   Re Delius 1957 – valid
   Re Shakespeare’s Memorial Trust 1923 – valid
   Re Hummeltenberg 1923 – failed [training mediums]
   Re Pinion 1965 – failed – [ a ‘mass of junk’ left to a museum]
   But there must be genuine public benefit – Oppenheim v Tobacco
    Securities Trust 1951 – money to educate children of BAT employees NOT
    the public [even though 1110,000 employees!]
Sport
   In itself – not in itself charitable Re Nottage 1895

   But – if part of a school – then education and
    can be valid

   Re Mariette 1915 – Eton squash courts and
    prizes
   IRC v McMullen 1981 – soccer facilities within
    universities and schools
Religion
   ‘faith and worship’ – ie ANY RELIGION

   Re Watson 1973 – specific sect of Christianity valid
   Re South Place Ethical Society 1980 – not valid – ethics not religion
   Still must have element of public benefit:
   Gilmour v Coats 1949 – closed order of nuns failed
   Re Hetherington 1989 – masses for the dead – public benefit
   Neville Estates v Madden 1962 – synagogue in Catford – public
    benefit – the congregation do public good
   Farnell v Stewart 1996 – faith healing valid
Other purposes
   Within the spirit of the 1601 legislation:

   Fire brigade – Re Wokingham 1951
   Army – Re Good 1905
   Industry Commerce and Art - Crystal Palace Trustees v Minister of Planning 1950
   Sport in schools/army – Re Gray 1925
   Animals, promoting human kindness – Re Wedgewood 1915
   NOT where there is a significant political element Southwood v AG 1998
    [disarmament]
   Recreation – sometimes – Re Scowcroft 1898
   But not in IRC V Baddeley 1955 [as no stamp duty paid if charitable!]
   But note under Recreation Charities Act 1958 [after Baddley] it will be a charity if it
    passes the ‘social welfare’ test – see Guild v IRC 1992 – BUT STILL A PUBLIC
    BENEFIT TEST
Other points
   The gift must be exclusively charitable unless:

   The gift is to ‘apportioned’ by trustees
   The trust also benefits non-charitable objects Royal
    College of Surgeons v National Provincial 1952 where it
    also benefited wealthy surgeons
   The gift is for a specific locality unless specified for non-
    charitable purposes
   The gift is to an official – assuming his duties are
    charitable Re Garrard 1907 [to a vicar]
Cy-Pres
   Non-charitable trusts – if ineffective, results back to
    settlor

   Charitable – the trust property can be applied for another
    charitable trust closely linked to the original

   IF…
   The original purpose is impossible or impractical AND
   The donor must have shown a paramount intention to
    benefit charity
Impossible?
   AG v City of London 1790
   ‘Trust for the advancement of the Christian religion among the
    infidels of Virginia’ – there weren’t any!

   Re Lysaught 1966
   No funds for medical scholarships to Jews or Catholics – the RCS
    refused to accept – so impractical to carry out trust – the
    discrimination clause was deleted
   Note – Charities Act 1960 has relaxed impossibility requirement –
    see s13(1) and also CA 1985 relaxation
   Also see the rules on initial impossibility and subsequent
    impossibility

								
To top