Charitable trusts Flashcards
(44 cards)
Statute of Charitable Uses 1601
Preamble → set out a list of charitable purposes.
Now repealed but parts are still enshrined in case law
Advantages of charitable status
→ Exemption from tax
→ For the public benefit - do not have to comply with rule against inalienability of capital because charities can last forever
→ Exempt from certainty of object - need to meet definition of charity
→ No requirement of administrative responsibility
→ If it fails - Cy-pres doctrine
What act are charities regulated by?
Charities Act 2001 - s13-17, 110
→ NOW Charities Act 2011
What powers to charities commission have?
→Statutory powers to investigate and deal with mal-administration
→ Remove charitable status
→ Decide if charity is a charity or not
Requirements for charitable status under Charities Act
- Show exclusive charitable purpose
- Purpose benefits an explicit section of society (public benefit test) → different rules for different heads of charity
Income Tax Special Purpose Commrs v Pemsel
Lord McNorton est. 4 heads of charity: Relief of poverty, advancement of education, advancement of religion and ‘other purposes’
→ Now 13 purposes under Charities Act 2011
Public benefit test rule → Re Resch’s WT
No charity can distribute property into private hands
→ Does not mean they can’t charge for their services, but cannot exclude the poor - all have to be able to afford/benefit and can’t go to private hands
→ Was a private hospital that charged for its services more than normal rate
Re Harding
→ Charities are not allowed to unlawfully discriminate
→ Trust for benefit of black community of Hackney. Was positive discrimination on skin colour - court said they would remove the reference to skin colour - but does this undermine what charity were trying to do? Need an EXCLUSIVE charitable purpose
→ Can discriminate based on sex
Chichester Diocesan Fund v Simpson
→ Needs to be exclusive charitable purpose
→ Said purpose was for charitable and benevolent purposes - not enough, money could be spent solely on benevolent sides and not charitable
How do you get charitable status?
Need to be on charities register → Charities commission
See if purpose matches with an existing purpose. If not → try find an analogy with existing purpose.
→ If novel - go back to PREAMBLE - now use ‘Other purposes’ section
Re Segelman (1996)
→ Prevention or relief of poverty
→ Poverty is a broad concept
→ Do not have to show that people benefit from what you do, just that they fall below poverty line
Re Gwyon (1930)
Cannot have a trust that also benefits the rich, needs to be limited to the poor - exclusively relieve the poor
Public benefit test → Prevention or relief of poverty
CAN limit to a social/contractual nexis (can’t do with other charitable heads)
→ Re Scarisbrick → Can set up a trust and limit to poor members of your family
→ Dingle v Turner → OR poor employees of a company
IRC v McMullen (1981)
→ Advancement of education is not limited to traditional academic activities to a specific institution, can include extra-curricular activities like amateur sport
→ Can also include museums, art galleries etc.
Re Hopkin’s Trust (1874)
→ Advancement of education
→ Not enough to accumulate info for info’s sake - needs to be a point to it.
→ A request to set up a trust for purpose of discovering the original manuscripts of plays that attributed to Shakespeare but discretion as to authentication. Held: genuine value to literature and history so was allowed
Re Koeppler’s WT (1986)
Legitimate to educate about political issues, but must be objective and impartial
Public benefit test → Advancement of Education
Oppenheim v Tobacco Securities Trust (1951)
→ Trust to educate children of employees and ex-employees of Tobacco company. Tens of thousand’s in class of B’s. Court said this is not a section of public because linked through employment.
→ Court held 2 things: 1) Section of public must be numerically negligible and 2) no personal or contractual nexis is leading your B’s
Re Koettgen (1954)
Ok to prefer private class (children) over public → Doubted in IRC v EGA Ltd but not overruled
→ Trust created for the promotion and furtherance of commercial education of British-born subjects, preference to be given to employees of a company
Re South Place Ethical Society (1980)
To advance religion, have to show 1) belief in a supreme being, and 2) show your believers worship that being
→ Overruled in Hodkin
Definition of religion → Charities Act 2011
Does not require a belief in God
→ Church of Scientology been told they do not fall under advancement of religion - even if they did meet newer definition of religion - wouldn’t meet public benefit test as too much of religion is behind closed doors
R (Hodkin) v Registrar General (2014)
→ Whether a scientology chapel counted as a place of worship for purposes of marriage registration. Court said it did count for this purpose. Overrules definition in Re South Place + Lord Toulson new approach to general approach to religion
Thornton v Howe (1862)
Trust to promote writings of Joanna Southcote → accumulated followers who believed she would birth the second coming of Christ. Court said she was foolish, but followers worshipped her and believed in God. Court allowed it. Seen as anti-charity as it was made during mormain period - would fail today
Public benefit test → Advancement of religion
If detrimental to public or confers no benefit - not charitable → Cannot just benefit a private class of people → Gilmour v Coates - refused to recognise public benefit in activities of closed order of nuns - no contact with outside world
Public benefit test → Other charitable purposes
IRC v Braddley → public benefit test is strict. If it restricts a group, must be NO personal nexus nor class within a class - must satisfy a sufficient section of public
