Charitable trusts

What does it mean for a trust to be charitable

Means it benefits the public

What are the advantages of a charitable trust

It beats the beneficiary principle and perpetuity it can last forever

What are the three things that a charitable trust need to be

It needs to have a charitable purpose, public benefit and be wholly and exclusively charitable

What did the charities act 2006 do

It extended the categories of charitable trust from 4 to 13. Also removed the presumption of public benefit for poverty and advancing religion and education

What are the exceptions to personal nexus and what does it mean

It doesn't pass the public benefit unless it's for the relief of poverty. It means employees of a company or members of a family of those linked by a personal relationship

OPPENHEIM V TOBACCO SECURITIES TRUST [1951]

Income of a trust fund was to be used to educate the children of employees and former employees of BAT Co and its subsidiary.

Held: Current employees of BAT numbered over 110,000 but as the opportunity to benefit was restricted by a personal nexus the public aspect was not satisfied → so did not satisfy public aspect of public benefit test

What are the two essential attributes for the advancement of religion

Faith and worship. A religion that involves belief in more than one God and one that doesn't involve belief in a God.

What constitutes as a sport

Games or sports that promotes health by involving physical or mental skill. Mental exertion in the form of chess is also sufficient.

Case of Guild v IRc1992

Recreational charities, emphasis on facilities and social welfare. Sports centre provided recreational facilities in the interests of social welfare for the public at large. Recreation on its own is not automatically charitable? It must fit within a recognised charitable category (from Pemsel) And show public benefit. House of Lords rejected it as a charitable trust and this showed the restrictive approach that they had.

What sorts of things are aimed in advancement of human rights

Promotion of religious and racial harmony and equality

Why is political purposes restricted and explain the case

McGovern v AG - court decided that it wasn't charitable because the purposes were political as they were trying to change laws and government policies. Cannot be charitable if it's political because it's not up to the court to decide whether it's within the public benefit to change laws.

What's the key thing to remember for animal welfare

Public benefit must be bala ced against a detriment or harm. National anti vicisection society v irc 1948. In this case, it couldn't fulfil the public benefit requirement as there was the detriment of a loss of medical progress. Detriment outweighed the benefit

Public benefit criteria

Must be an identifiable benefit and the benefit must be to the public or a section of it.

Confinement to an area + case

It's reasonable to restrict it to a geographical area like a town or a city but a specific road isn't reasonable. Irc v baddeley - trust was not charitable because the class was confined to a particular creed.

Re coxen relevance ?

The trust contemplated a division and money can be quantified so it was split up. About private trusts as opposed to a charitable trust - case about uncertainity of a condition subsequent. Cannot just benefit specific individuals.

Explain ancillary and incidental as exceptions

A charitable trust can have non charitable purposes such as political if it's ancillary (supporting the main purpose of the charity or incidental ( a minor side effect of the main charitable purpose) but the purpose had to be exclusively charitable

What is benign construction in Lord Halisham’s view

In the case of IRC v Mcmullen 1981- benign construction means that courts should interpret a trust in a favourable way that it can be charitable if that interpretation is possible. (courts cannot be too strict)

What is the Cy Pres Doctrine and when can it be used

Purpose trusts that are already charitable. Applies when there is initial failure- charity never wirked from the start but there was general charitable intention (for example).

Subsequent failure - charity that worked at first but became impractical and so the funds can be redirected to a similar healthcare purpose *for example. Can also apply when the funds are to small to be useful for the purpose, if it's outdated and no longer relevant.

What is the exclusivity requirement

For a valid charitable trust, all the purposes must be charitable

What is the severance exception of the exclusivity requirement

Courts can sever the fund into two parts of exclusively charitable purposes and non charitable purposes.

Salusbury v Denton

A case where the trust was severed and the charitable side became a valid charitable trust.

Re Coulthurst

Charitable case because the purpose relived poverty under s3 (1) of the charities act

Re south place ethical society

Main purpose was charitable but other purpose of social activity was held not to be charitable but was incidental to the main purpose so was valid.

Dingle v turner

The Compton test which requires oublic benefit doesn't apply to poverty cases as a testator established a trust to provide pensions for poor employees. Even thoughbjts so narrow it was still valid

London borough of Merton council v nuffield health

Fee paying members only faculty. The court stated that although there are high membership fees rgar could exclude those of modest means, it still benefited the public and so was a charitable trust.

Selection being permissible for sufficient section of public

Just because there's a selection involved doesn't mean that the purpose doesn't benefit a section of the public as long as the selection process is available to all.

In what way is poverty treated differently as a charitable purpose

The opportunity to benefit can be unreasonably restructedbinbany way and still extend to a sufficient section of the public, can even just be members of the family

Heo can you distinguish between a charitable trust and a private trust

“To my relatives” rather than “to my son and daughter”, isn't naming the exact beneficiaries.

Advancement of education

Can also be restricted by locality and parental occupation or religion etc

What does poor mean in terms of charitable trusts

Doesn't mean destitution just those that aren't as well off.

Advancement of education

• While education is generally presumed to be beneficial, the Charities Act 2006 (now enshrined in the 2011 Act) removed the legal presumption of public benefit, requiring all educational charities to prove their activities benefit the public, not just a restricted group.