Topic 4- Charitable Trusts
Lecture 1- The Advantages of Charitable Status
Charities have been called the third sector (after public and private sector)
How can you govern charities?
These are valid despite the beneficiary principle, as it benefits the public
Advantages:
Not void by the beneficiary principle
Tax advantages- don’t have to pay income tax and advantages on business rates
The money can be retained as a capital fund (don’t have to spend it in a certain
amount of years)
Who is the enforcer of charitable purpose trusts?
Attorney general enforces them- monitor the activities of charity
You have to apply to the charity commission to set up a charity
Suella Braverman is the current AG
What is needed? Need all 3 or a valid charitable purpose trust
Charitable purpose + Public benefit + Wholly and exclusively charitable
Lecture 2- What is a charitable purpose- Poverty
Preamble to Charitable Uses Act 1601
“… the relief of aged, impotent and poor people; the maintenance of sick and maimed
soldiers and mariners, schools of learning, free schools, and scholars in universities; the
repair of bridges, ports, havens, cause-ways, churches, sea-banks, and highways, the
education and preferment of orphans; the relief, stock, or maintenance of houses of
correction; the marriage of poor maids; the supportation, aid and help of young tradesmen,
handicraftsmen and persons decayed; the relief or redemption of prisoners or captives; and
the aid or ease of any poor inhabitants concerning payment of fifteens, setting out of soldiers
and other taxes …”
Commissioners of Income Tax v Pemsel [1891]
“Charity in its legal sense comprises four principal divisions:
trusts for the relief of poverty;
trusts for the advancement of education;
trusts for the advancement of religion; and
trusts for other purposes beneficial to the community, not falling under any of the
preceding heads.”
, Pre 2006 Act Public benefit was presumed for these
Scottish Burial Reform and Cremation Society v Glasgow Corporation [1968]
Lord Wilberforce stated:
"have to keep the law as to charities moving according as new ideas arise or old ones
become obsolete or satisfied."
Which of the following do you think are charitable?
(a) A trust to publish the works of Joanna Southcote, who, at the age of 64, declared she
was with child by the Holy Ghost and would give birth to the second Messiah?
(b) A trust to relieve poverty among my relations
(c) Eton school
(d) A trust to promote faith healing
Over the years these have all be upheld as charities
Charities Act 2006 became the Charities Act 2011
(List of compliances are on the handout)
continued validity of charitable purposes upheld by pre-2006 case law
extends the categories of charitable purposes from four to thirteen
Increased role for Charity Commission
removes the presumption of public benefit re poverty, advancing religion and
advancing education
required Charities Commission to issue guidance re the public benefit requirement
Charities act repeated the first 3 heads but made the fourth one into 10 from
Commissioners of Income Tax v Pemsel [1891].
Prevention or Relief of poverty
Case law has said poverty is a relative thing not an absolute term
Re Coulthurst (1951)
“It is quite clearly established that poverty does not mean destitution. [The term poverty is]
of wide and somewhat indefinite import; it may not unfairly be paraphrased for present
purposes as meaning persons who have to “go short” in the ordinary acceptation of that
term, due regard being had to their status in life and so forth.”
Open to varied interpretation
Re de Carteret (1933)
Lecture 1- The Advantages of Charitable Status
Charities have been called the third sector (after public and private sector)
How can you govern charities?
These are valid despite the beneficiary principle, as it benefits the public
Advantages:
Not void by the beneficiary principle
Tax advantages- don’t have to pay income tax and advantages on business rates
The money can be retained as a capital fund (don’t have to spend it in a certain
amount of years)
Who is the enforcer of charitable purpose trusts?
Attorney general enforces them- monitor the activities of charity
You have to apply to the charity commission to set up a charity
Suella Braverman is the current AG
What is needed? Need all 3 or a valid charitable purpose trust
Charitable purpose + Public benefit + Wholly and exclusively charitable
Lecture 2- What is a charitable purpose- Poverty
Preamble to Charitable Uses Act 1601
“… the relief of aged, impotent and poor people; the maintenance of sick and maimed
soldiers and mariners, schools of learning, free schools, and scholars in universities; the
repair of bridges, ports, havens, cause-ways, churches, sea-banks, and highways, the
education and preferment of orphans; the relief, stock, or maintenance of houses of
correction; the marriage of poor maids; the supportation, aid and help of young tradesmen,
handicraftsmen and persons decayed; the relief or redemption of prisoners or captives; and
the aid or ease of any poor inhabitants concerning payment of fifteens, setting out of soldiers
and other taxes …”
Commissioners of Income Tax v Pemsel [1891]
“Charity in its legal sense comprises four principal divisions:
trusts for the relief of poverty;
trusts for the advancement of education;
trusts for the advancement of religion; and
trusts for other purposes beneficial to the community, not falling under any of the
preceding heads.”
, Pre 2006 Act Public benefit was presumed for these
Scottish Burial Reform and Cremation Society v Glasgow Corporation [1968]
Lord Wilberforce stated:
"have to keep the law as to charities moving according as new ideas arise or old ones
become obsolete or satisfied."
Which of the following do you think are charitable?
(a) A trust to publish the works of Joanna Southcote, who, at the age of 64, declared she
was with child by the Holy Ghost and would give birth to the second Messiah?
(b) A trust to relieve poverty among my relations
(c) Eton school
(d) A trust to promote faith healing
Over the years these have all be upheld as charities
Charities Act 2006 became the Charities Act 2011
(List of compliances are on the handout)
continued validity of charitable purposes upheld by pre-2006 case law
extends the categories of charitable purposes from four to thirteen
Increased role for Charity Commission
removes the presumption of public benefit re poverty, advancing religion and
advancing education
required Charities Commission to issue guidance re the public benefit requirement
Charities act repeated the first 3 heads but made the fourth one into 10 from
Commissioners of Income Tax v Pemsel [1891].
Prevention or Relief of poverty
Case law has said poverty is a relative thing not an absolute term
Re Coulthurst (1951)
“It is quite clearly established that poverty does not mean destitution. [The term poverty is]
of wide and somewhat indefinite import; it may not unfairly be paraphrased for present
purposes as meaning persons who have to “go short” in the ordinary acceptation of that
term, due regard being had to their status in life and so forth.”
Open to varied interpretation
Re de Carteret (1933)
