Charities

Charities

1. Benefits of charitable purpose trusts

   • Tax exempt from: Capital gains, income, corporation, stamp duty
   • Exempt from perpetuity rule
   • Exempt from beneficiary principle
     • Morice v Bishop of Durham
     • Instead trust is enforced by the Attorney General

2. Unincorporated association

3. Company

4. Trust

5. Definition of charitable status

   • S.2 Charities Act 2011
     • Activity must be recognised by law as charitable
       • Historical
         • Charitable Uses Act 1601
           • Distressed maidens" "repair of churches"
         • Pemsel 1891
           • Relief of poverty
             • Importance of wording
               • Re Niyazis will trusts
                 • "working men' & 'Hostel' inferred low income
               • Re Sanders
                 • 'working classes' not enough to infer poverty
             • Narrow class upheld
               • Dingle v Turner
                 • Charity for poor employees upheld
               • see also
               • Re Segelman
                 • 26 "poor & needy' allowed as included future dependants
           • Advancement of religion
             • S.3(2) Charities Act 2011
               • Definition: Belief in one or more god or religion without belief in a god (Buddhism)
             • Thornton v Howe
               • Pregnant with next messiah, the foolishness of belief is irrelevant if it is a sincerely held belief
             • Courts reluctant to assess value of religion but assumes some religion is better than none
             • Neville Estates v Madden
             • Gilmour v Coats
               • Cloistered nuns "prayers for public' held to be intangible benefit=failed
             • Re Hetherington
               • Public masses for family members accepted as performed in public
           • Advancement of education
             • Re Shaw
               • Lady Shaw= Finishing school = accepted
             • Re Shaw
               • George Bernard= Extend alphabet = Rejected
             • McMullen
               • Education: instruction, training, & practice
             • Definition
             • Re Hopkins
               • Research in to authorship of Shakespeare works
             • Re Dupree
               • Chess tournament "Keen not to create slippery slope, 'draughts, ludo etc resulting in stamp or egg collecting"
           • Other purposes beneficial to community
           • Presumption of public benefit of heads 1-3
       • S.3(1) Charities Act 2011
         • (a) - (c) and (m) = Pemsel
           • (e) Community
             • (f) Arts, Culture, Heritage or Science
               • (g) Amateur sports
                 • (h) Human rights/ promotion of diversity
                   • (i) Environmental
                     • (j) Needy- Youth, Aged, ill, Disabled
                       • (k) Animal welfare
                         • (l) Armed forces/ emergency services
                           • (m) All other charitable purposes
                   • See
                     • S.3(1)(h)
     • Must be for a recognised public benefit
       • Cause must be tangible benefit to the public
         • Re Pinion
           • "Worthless pile of junk"
       • Must be accessible to section of public
         • very lenient for poverty,
           • Education
             • Oppenheim v Tobacco Securities
               • Education for employees children = Failed on personal nexus with doner=employer
                 • Rowntree Memorial Trust
                   • Accepted despite facts similar to Oppenheim
             • Re Koettgen
               • Educational trust open to everyone but 75% was to be applied to a private class = accepted as preference did not amount to exclusion
           • Poverty
         • Re Compton
           • Children- personal nexus/not section of public
         • Re Scarisbrick
           • Donors poor relations sufficient to satisfy public benefit
       • S.4 Charities Act 2011
         • S.4(2) No presumption of benefit as in Pemsel
     • Must be exclusively charitable
       • National Anti-Vivisection Society v. IRC
         • Cannot pursue politic aims as main purpose
           • Amnesty international
             • Acceptable if political aim is ancillary
               • RSPCA
               • Stonewall-LGBT charity
           • Mc Govern
             • Aims that support: political party, law changing, change policy
       • Any non charitable purposes must be ancillary to the main charitable objective

6. S.63 Charities Act 2011

   • Allows appeal for failed charitable gifts to be applied Cy-pres
     • Cy-pres scheme
       • Initial failure
         • Subsequent failure
           • Gift/trust is effective but charity ceases after testators death but before legacy paid
           • Purpose posible at death but becomes subsequently impossible
           • Trust surplus after purpose achieved
         • Charity never existed
         • Re Harwood
         • Charity ceases b4 testers death
         • Insufficient funds
         • Purpose impossible - no planning permission etc
         • General charitable intent must be found
         • Biscoe v Jackson
           • Soup kitchen-General charitable intent

7. S.62 Charities Act 2011

   • Cy-pres can be used if it is impossible, impractical, legal or inefficient for trust to be carried out

8. Failed Gifts

   • Re Fakarer
     • Lapsed gifts with a general charitable intention can be saved if original charitable company/unincorp assoc amalgamated with another charity which took over its assets & purposes before death of testator
     • Amalgamation
   • Re Vernons WT
     • Gift to unincorporated association that has ceased but its purposes are being carried out by another body, gift can be transferred to that. If purposes have discontinued consider Cy-pres.
   • Abbott fund
     • Fund collected for maintenance of 2 ladies= surplus after their death. Held = Contributors/settlor never intended outright gift so surplus resulted back to contributors
   • Re Fingers
     • Legacy to charitable company will be construed as gift unless testator specified purpose. if company ceases=resulting trust back to estate unless Faraker or cy-pres can apply