how does a charitable Trust work?
charitable trusts are trusts for the purpose, (property is held for a Purpose, there is no beneficiary)
purpose to be 'charitable'
charities act 2011 MUST BE FOR THE PUBLIC BENEFIT
-exempt from Inheritance Tax
-exempt from tax on investments
-exempt from income tax
-Gift Aid (reclaim the basic rate of tax on gift)
S.1 DEFINES CHAIRTY
s.2 defines CHARITABLE PURPOSE
s.3 defines PURPOSES
Charitable status - S.3 (1)(A) POVERTY
poverty defined in case:
Widows and orphaned children of deceased officers of the bank
Poverty just means when your going SHORT than your normal doing. (food, Clothes)
RE SAUNDERS TRUST
Left a gift for the working classes and their families, just being working Class isn't enough. Just because your working class, doesnt mean your poor. If It had followed RE YOUNG for the distressed working class it would have been Valid.
RE NIYAZIS WILL TRUST
A turkish cypriot left money for a working mens hostel, the area in Cyprus the hostel was being setup in was poor, and the word 'Hostel'meant Working people going SHORT.
JOSEPH ROWNTREE MEMORIAL TRUST
something, there need to be a need for that relief.
*the prevention of property includes preventing those who are poor from From becoming poorer and preventing people who are not poor from becoming poor.
S.3 (1) (B) - EDUCATION
IRC V MC MULLEN
Lord Haisham ''a balanced and systematic process of instruction, Training and practice...
containing both spirutual, moral, mental and physical elements.
INCORPORATED COUNCIL OF LAW REPORTING V ATTORNEY GENERAL
council wanted charitable status, it was argued there is no educational Purpose in publishing law reports. And said it just allows lawyers to make Money. COA disagreed, given charitable status. The council got the reports out There for the public which made them a valid charity.
EDUCATION IS NOT POLITICAL
MC GOVERN V ATTORNEY GENERAL
campaigning to change the law is political purpose not research. Human Rights in now covered by the statues, changing the law is still political.
ATTORNEY GENERAL V
student unions are in the centre of an Educational purpose, they too become an educational purpose.
S.3 (1)(c) - RELIGION
THORNTON V HOWE
publications of the writings of one Joanna Southcroft who claimed to Have been pregnant by the holy ghost. Held to be of the public benefit, the Root of the word 'Publication' is public.
VARSANI V JESANI
religion does not have to be monotheistic (hindu sector)
monotheism is the belief in a single all powerful god as opposed to Religions that in believe in one gods. Hinduism is a religion that believes in More than one god.
RELIGION INLCUDES - S.3 (2) (a)
1. BELIEF IN ONE GOD
MUST BE FOR PUBLIC BENEFIT BECAUSE OF EXEMPTION OF THE TAX
S.2 (b)- BE FOR PUBLIC BENEFIT,
traditonally presumed certain charities are for: 1.Education, 2.Poverty, 3.Religion.
NO LONGER THE CASE S.4 (2) & S.4 (3)
RE FOVEAUX - left a gift to which were against animal testing, Justice Chityy found that the gift was charitable, basis for this was a subjective Test. If the person giving charity (gift, money) thinks its charitable then it Is.
OPPENHEIM V TOBACCO - left a gift for the children of british american workers. If there is a Personal nexus there is no public benefit.
IRC V EDUCATIONAL GRANTS ASSOC - 80% was for the personal employees >nexus, therefore it failed.
differences between Private and public purpose trusts.
private - most are void for Gaving no beneficiary, purpose trusts can exist for the personal benefit of the Settlor.
public- dont need human Beneficiary to be valid, charitable trust can last for ever, must carry some Element of public benefit.
ancient doctrin which means 'near as possible'. Allows either the court Or the charity commission to ''change the purpose'' of a charitable purpose. Maybe outdated, old fashion, or completely impossible.
1. Keeps property for Charity
alternative to change the purpose is to say the gift is ineffective
innective gifts result to the donor, or his next of kin is dead, cy-pres Stops this from happening.
2. Applied for Purposes 'next neareast'
cy-pres means 'near as possible'
3.Respecting donors Wishes
court is restrained, it cant just do whatever it likes with property.
INTITIAL FAILURE - Failed before its even applied to a charity
* GIFT TO A CLOSED CHARITY,
*GIFT FOR AN IMPOSSIBLE PURPOSE.
testator setup a schoolm it was way too complex to carry out so it Failed.
avoiding INITIAL FAILURE: Instrutional Amalgamation
will maker left a legacy to hannah bay charity, charity for benefit of Widows in london. Charity had amalgamated with another charity to create once Single charity. Held charity not failed as the charity continued which Ecompassed the objects of the first charity. Similar.
WHEN TWO OR MORE CHARITIES JOIN TOGETHER IT WILL NOT FAIL.
only for trusts not for companies.
reforming the purpose of Established charities s.61
- established charity runs out of money
- established charity discovers that its purposes have become Impossible.
-established charity thinks that its have become useless
no general charitable intention is required. Gift is kept in charity Whether or not the testator had a general intention.
s.62 (1) (a) - FULFILMENT
s.62 (1) (c) – MERGER
S.62 (1) (E) – NO USEFUL PURPOSE
S.63 – UNKNOWN DONOR