charitable trusts, nature and regulation Flashcards
cases for the nature of charitable trusts
2
1) Dingle v Turner
2) Re Davis
Dingle v Turner
-Lord Cross noted 2 identifiable privilieges enjoyed by charitable trusts
1) priviliges as to essential validity
2) finanical tax privilieges (this distiniguishes them from private trusts)
privileges as to essential validity
- for the benefit of purposes not legal persons
- they exist to set up a charitable purpose
- dont require certainty of objects
- if the charity fails miney can keep moving to a different charity
finanical privileges
- charitys are exempt from tax on income and capital gains from most sources
- Per sections 23 and 76 Inheritance Tax Act 1984, gifts to charities are exempt from inheritance tax.
- However, charities are not exempt from VAT.
cases for the substantive law of charitable purposes
2
1)morice v bishop of durham
2) Re Macduff
morice v bishop of durham
- for a trust to be charitable in law, it must be for a charitable purpose or purposes defined as ‘exclusively charitable.’
- In Morice v Bishop of Durham, the court assessed a testamentary gift of residue made ‘to such objects of benevolence and liberality as the Bishop of Durham in his own discretion shall most approve of.’
- It was held that objects of ‘benevolence’ and ‘liberality’ were not limited exclusively to charitable purposes, and that the testamentary gift therefore failed
Re Macduff
- Trusts for ‘charitable or benevolent purposes’ [emphasis added], for example, will fail
cases for defining charity
5
1) Pemsel
2) Re Coulthurst
3) Re Young
4) Re Clarke
5) Re Saunders
Pemsel
-said charity in a legal sense comprises of 4 prinicple divisions
- 1) trust for relief of poverty
- 2) trusst for advancement of education
- 3) advancement of religion
- 4) for other purposes beneficial to the community
- now have 2011 act that these 3 provisions are in
charitys act 2006
- introduced a statutory definition of ‘charity’, which was later amended by the Charities Act 2011.
charitys act 2011
-this is what is used now
- s3(1) a - m provides current list of statutory charitable purposes
- consolidated them into a single statute
Re Coulthurst
- quite clearly established that poverty does not mean destitution;
- suffering a temporary set back, law doesnt necessarily regard you as living in poverty
Re Young
- gift for ‘distressed gentlefolk’ a valid charitable trust.
- If you define more broadly in the trust what you meant by distressed gentle folk – here was with reference to people living in destitution more extreme poverty, then the trust could be upheld as a charitable trust for charitable purposes and succeed in application to a charity
Re Clarke
- gift for persons of ‘moderate means’ also valid.
- How broad this concept of poverty is in charitable law – what is moderate means
- As long as the settlor can explain in the own words what was meant by it and give examples and broaden it out to include people in destitution then the trust will be upheld
Re Saunders
- gift for ‘the working classes and their families’ not deemed charitable, however. - justification of this is that working class is not synonymous as poor -
- You could be born and raised working class but no longer poor
- Someone being working class, might mean they’re from a certain economic background in the English context not necessarily mean that they’re economically destitute
Independent schools council case v charity comission
- trusts for schools, including fee- paying schools, are charitable provided that the school is non-profit-making or uses its profits for school purposes only.
- If it is profit making it needs to reinvest its profits back into the school
- Have to make reports to the Chairty commission justifying there charitable purpose, so the charity commission can confirm – this is what they have to do in there annual reports – justify they’re for public benefit, not political purposes
- They argued they do public benefit activities and they won the case
- Were able to build a bigger picture that they were performing charitable purposes, and the public benefit so the tribunal sided with them and the charity commission had to revise there guidelines on public benefit
- Pb 1,2,3 the documents that follow this case is because the independent school was able to challenge the existing guidance on public benefit test
case for advancement of education and what section
subsection3(1)(b)
-independent schools council case
case for advancement of religion and section
subsection 3(1)(c)
Gilmour v Coats [1949]
Gilmour v Coats [1949]
‘A religion can be regarded as beneficial without it being necessary to assume that all its beliefs are true,’
- How can you regard a religion to be beneficial if you don’t believe its belief yourself
trusts and poltical purposes
cases for political purposes
2
1) bowman v secular society
2) mcgovern v attorney general
bowman v secular society
-equity will refuse to recognise a charitable ‘purely political objects
McGovern v Attorney General
- a trust will be regarded as political if it has as a direct or principal purpose supporting a political party, changing the law, or changing government policy.
- For example, a gift made for the advancement of adult education on the lines of a Labour Party memorandum was deemed ‘political propaganda masquerading as education’ and, therefore, not charitable: Re Hopkinson [1949] 1 All ER 346 (Vaisey J).
- As long as not pimarily or purely for political purposes can keep charitable status
ss83-85 charities act 2011
confer on the Charity Commission extended powers to suspend or remove trustees, to give specific directions for the protection of charity and to direct the application of charity property.
