Law in Equity and Trust regarding Charities Essay

Law in Equity and Trust regarding Charities - Essay Example It has a specific legal meaning; the Charities Act 1993 describes a charity as: "Any institution, corporate or not, which is established for charitable purposes and is subject to the control of the High Court in the exercise of the Court's jurisdiction with respect to charities.": s96(1) This tautologous explanation gets us no further, other than to observe that it is the Courts who determine what 'charitable purposes' means according to current legislation and that an organisation cannot be registered as a charity by the Charities Commission if it has been set up under the laws of a foreign country which for these purposes include Scotland, Northern Ireland, the Isle of Man, or the Channel Islands. Overall this description in itself is unsatisfactory since it promotes uncertainty, and where there is uncertainty in the law there will be litigation. Whilst on the face of it the definition of what a charity is should be found in the Charities Act, the Courts actually refer to the Charitable Uses Act 16011 to determine the definition of a charity, despite the fact that this legislation has been repealed. The Courts follow the 'spirit and intention' of the 1601 Act and the definition of 'charity' has been developed through statutory interpretation and case law precedent arising predominantly from disputes over wills, taxation status and/or challenges against decisions made by the Attorney General on behalf of the Charities Commission. Examining the case law suggests that organizations will be recognized as charitable if they have the following characteristics: The trust must have a charitable character The trust must be exclusively charitable The trust must (on balance) be beneficial The trust must benefit the public The trust must not distribute a profit Charitable Character Lord MacNaughten in Income Tax Special Purposes Commisoners v Pemsel [1891] identified four divisions of charitable purposes namely; 1) The relief of poverty; 2) The advancement of education; 3) The advancement of religion; and 4) Other purposes beneficial to the community. Exclusively Charitable All the purposes to which a trust may use its assets must be charitable. The classic case was Maurice v Bishop of Durham [1805]. That particular trust failed since it was expressed to be for charitable or benevolent' purposes, and not everything that is benevolent' is recognized as charitable in English law. Beneficial There is a presumption that charities which fall under the poverty, education or religious objects are beneficial. In the past the Courts generally sought to find an analogy between the purpose of the proposed charity and the 1601 Act: Williams Trustees v IRC [1947]. More recently the cases have also sought analogies with decided cases. For example in Scottish Burial Reform & Cremation Society v Glasgow Corporation [1968] it was held that the promotion of low cost cadaver disposal (cremation) as it was of benefit to the community, within the 'spirit and intendment'' of the Charitable Uses Act 1601 and analogous to other charities that had themselves been deemed to be analogous to charities in that list. Public Benefit Charities are distinguished from Private Purpose Trusts - which benefit named individuals - and Discretionary Trusts, which