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Second exemption to purpose trusts: Charites have existed since
1601. o Charities Act (2006) (amended Charities Act (2011)) -
not an amending but a consolidating act (all previous caselaw therefore relevant)
o S.1(1) A charity is an institution which is established for a charitable purpose only: A charitable purpose is one which falls in s.3(1) and which is for the public benefit.
The need for charitable laws:
o Charites are good things: morally ethically good, emotive,
welfare state, distribution of wealth to those in need. Inland revenue could not raise similar amounts.
o Charities are not as benevolent as we might hope: workers can abuse powers; often patriarchal; tax breaks; potential corruption; proliferation of small charities on the same issue can be inefficient.
"Independent schools, private hospitals and clinics,
universities, artistic performances and a number of other upper and middle-class institutions should be excluded" (Minority Report of Bent Whitaker in the
It retards progress towards true socialism because it presupposes the inequality which it purports to try to eliminate - MR Chesterman
Cannot be for profit
Charitable funds can only be spent for charitable purposes
o Legal (these are uncontroversial)
No need for three certainties (no certainty of object)
Courts lean towards validating a Charity rather than not - unless there is very clearly no intention
Moggridge v Thackwell (1802): A charitable trust will not fail if the object of the trust are uncertain. It will also not fail if the aims of the trust are not clear.
Rule against inalienability and against perpetuities inapplicable (can last for ever)
Majority Vote: n private express trust trustees must act unanimously.
Number of Trustees: four in private express, 20-30 in charities.
Charities are enforced by the AG
Cy-près Doctrine (below)
o Fiscal (more controversial) Charities are exempt from the vast majority of taxations: no cooperation tax, income tax, inheritance tax plus gift aid.
Hayton and Marshall: "The fiscal advantages are such that … over £400 million tax is lost" pa
A large number of tax avoidance schemes.
Traditionally a charity:
o 1) Had a charitable purpose
Preamble of the Statute of Elizabeth 1601:
Relief of poverty
Advancement of education
Advancement of religion
Other purposes beneficial to the Community (the catch all)
List expanded over time. Now s.3 of Charities Act 2006/11
2) For Public Benefit: own test.
Previously presumed. Now no presumption. Must be proved on a annual basis (s.4(1) CA 2011)
o 3) Exclusively charitable: if more than one purpose all purposes must be charitable
Chichester Diocesan Board v Simpson  -
'charitable or benevolent objects' were held not to be charitable.
If the purposes are 'charitable and philanthropic',
they are wholly charitable; but if they are described as 'charitable or philanthropic', the trust will not be charitable as the funds could be applied entirely to non-charitable purposes. So will fail.
1) The Relief and Prevention of Poverty: a genuine risk that someone may fall below the poverty line as objectively determined.
o Poverty is relative not looking for absolute poverty (Re
It is enough to 'go short' (not having enough to satisfy basic requirement) Re Coulhurst )
Being simply 'working class' does not mean poor (Re
But Poverty can be adduced from additional evidence:
Re Niyazi's  - 'working men's hostel' may suffice to imply those in need; the money left was so limited it could only cover the most basic of facilities.
Other permitted charities:
"distressed gentlefolk" (Re Young);
"widows and orphans in a particular area" (AG v
Power), "to give 5 Guinea per week to the eldest respectable inhabitant in Gunville" (Re Lucas)
"gifts for unsuccessful literary men" (Thompson v Thompson)
But not provision of 'knickers' to boys (Re
o Meaning of relief:
IRC v Baddeley  - relief is equated with need; a need people have but cannot satisfy themselves.
Joseph Rowantree v AG - cannot be for amusement purposes (e.g. going on holiday)
Children's Charities that send sick kids to
Disneyland can only do so under the advancement of health headings.
o Meaning of prevention:
Was an addition to the existing law. Influenced by AITC
Foundation's Application for Registration as a
Wanted to help people who had suffered as a result of the collapse of a particular type of investment. Investors were nto poor but were held to be at risk.
2) Advancement of Education
Advancement - must be for genuine progression.
o Meaning of Education
Schools of learning/free schools/scholars and
But schools are not necessarily charitable, e.g. local schools and private schools for profit.
o Other types of education (very broad):
Royal Choral Society v IRC  'to form and maintain a choir'
Council of Law Reporting EW v AG  - 'the improvement of useful branch of a human knowledge and its public dissemination'
Re Dupree - "chess tournament" - ok - although it came with "slippery slope" warning"
McGraph v Cohen: Trust to establish rose garden at university. Held it would be valid if it is deemed to inspire all but the most blase students.
Re Melody - "to provide annual treat or field days for school children" - ok as it would encourage nature studies
Re Lopes "even a ride on an elephant may be considered education"
o But there are limits
Re Hummeltenberg - college to train spiritualistic mediums - not charitable
Re Pinion - Harman LJ - 'museum of junk' and
"schools for pickpockets or prostitutes - not charitable
Southwood v AG -political activities masquerading as education are not cahritible
Research can be educational but must be some dissemination with others (i.e. public benefit)
Slade J in McGovern v AG : must be a useful subject of study; must be disseminated; must be for public benefit.
These features are presumed in the absence of a specific declaration.
But there are some that are not useful:
Re Shaw  - Research for Bernard Shaw's 40-letter alphabet, not useful.
Re Hopkin's Will Trust  Research on the question of who wrote the works of Shakespeare or Bacon was useful.
Re British School of Egyptian Archaeology
 - Egyptology is useful.
3) Advancement of Religion
Courts refuse to provide a strict definition of religion
(Neville v Madden) but generally allow a broad definition
Thornton v Howe (1862): recognised trust for dispersing the text of self-proclaimed prophetess
Re South Place Ethical Society  per Dillon J:
Religion requires a belief in something supernatural and there must be faith and worship of this supernatural element.
Promotion of ethics alone is not enough (may fall under another category)
o Recognised religions: Christianity; Hindu /Sikh (all subgroups); Islam (all sub-groups); Judaism / Moonies (the
No one has challenged Buddhism.
Theosophical Society is not recognised.
o The Church of Scientology
1972: Hubbard v Vosper drew negative comments from Denning
1982: Church of New Faith v Commissioners for
Payroll Tax - recognized in Australia. Led to increased recognition in Europe.
1999: rejected as did not have element of worship nor public benefit (reputation of being harmful to communities)
2014: R (Hodkin) v Registar - request to be certified as marriage institution. Ruled as valid in SC.
The church has not (yet) applied to be registered as a
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