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31 Cards in this Set

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Privileges enjoyed by charitable trusts?
1) tax privileges - no income tax, corporate tax, capital gains tax.
2) privileges as to validity- EXEMPT FROM BENEFICIARY PRINCIPLE AS THEY ARE VALID PURPOSE TRUSTS.
3)also more relaxed regarding certainty of objects.
4)exempt from the rule of perpetuities.

5) exempt from rule against inalienable capital

What were the 3 main sources governing charitable trusts before the charities act 2006?
1) premable to charitable uses act 1601;
2) the 'four heads of charity' set out in Pemsel;
3) case law and decisions of charity commissioners.

Test for Charitable status

Must be:


1. Legally chariable purpose - s.3(1)(a)-(m), CA 2011


2. For the public benefit - s.4, CA 2011


3. Exclusively charitable - Blair v Duncan

Which case set out the original 4 heads of charity and what were they?
Pemsel
1)relief of poverty
2)advancement of education
3)advancement of religion
4) other purposes beneficial to the community not falling under any of the preceding heads.



now within s.3(a)(m), CA 2011

Prevention or relief of poverty - s.3(1)(a), CA 2011

to relieve the poverty or financial hardship of anyone who does not have the resources to do so - Charity Commission Guidance




is relative and does not mean destitution - Coulthurst




There can be a personal nexus - Dingle




Aged, impotent and poor should be read together - Joseph Rowntree Memorial




Relief - implies the person has a need attributed to their condition that they cannot or would struggle to alleviate on their own - Joseph Rowntree Memorial




Working class is not synoymous with poor - Re Saunders





Advancement of education

Education: all schools of learning - Abbey Malvernwells


Including: gifts for education research - Re Hopkins Trust




Fee paying schools - Independant Schools Council



Research if it is a useful object of study; the results are disseminated; the trust must be for the benefit of the public, or sufficiently important section of the public. - Mc Govern




Promoting the practice of choral works - Royal Choral Society




Publication of law reports - Incorporated Council for Law Reporting




Must have educational value - Re Shaw

Advancement of Religion

Religion: man's relationship with God - Re South Place Ethical Society


- includes belief in more than one god or no god at all - s.3(2)(a), CA 2011




Advancement: to take positive steps to sustain and increase religious belief - United Grand Lodge of Free Masons




closed religious communities do not advance religion - Gilmour




masses are celebrated in public so they advance religion - Re Hetherington

Other purposes beneficial to the community

must be sufficiently linked to the purposes of the 1601 Act Preamble - Pemsel




must be beneficial to the community but also meet the requirements of a charitable trust - Union Bank of England





Recreational Charities

Recreation is a charitable purpose - Glasgow Police Athletic Association




a social element attached to a charitable gift or trust would render it to be not exclusively charitable - Williams




The provision of facilities for recreation can be found to be charitable - s.5, CA 2011, if it is in the interest of social welfare




Social welfare - with the object of improving the conditions of life for persons intended - s.5(3)(a), CA 2011


must be available to the public at large - s.5(3)(b), CA 2011

what was the traditional position regarding advancement of amateur sport?
Re Nottage [1895]- there had to be some other factor (over and above sport itself and such health benefits) in order for the sport to be charitable.
What is the current position on amateur sports?
law commission has issued guidance stating that amateur sports are now charitable- as a result of the mere connection between sport and health.
What is the effect of provision (m) 'any other purposes..?'
it allows the law to evolve in light of changing social and economic circumstances.
Which case states that regarding advancement of animal welfare, the performing and captive animals defence league was NOT charitable because the organisation's aims could only be achieved by a change in the law.
Hanchett-Stamford v AG [2009]

Political Purposes



Where the main object or the main object is to obtain an alteration of the law - National Anti Vivisection Society v. IRC



Certain objects of amnesty international were not charitable because achieving them would require a change in the law. - McGovern v AG [1982]
What is stated under section 3(2) CA 2006?
public benefit will no longer be presumed in relation to any purpose.



however - low threshold for relief of poverty (permitted personal nexus) and high threshold for advancement of education (no personal nexus)



What are the 2 elements of public benefit?
1) there must be an identifiable benefit/benefits (benefit aspect);
2) the public, or a section of the public must benefit (public aspect).



public benefit will no longer be presumed in relation to any purpose.




however - low threshold for relief of poverty (permitted personal nexus) and high threshold for advancement of education (no personal nexus) - Oppenheim

What are the 3 separate elements which make up and 'identifiable benefit?'
a) must be clear what the benefits are;
b) the benefits must be related to the aims;
c) the benefits must be balanced against any detriment or harm.
What are the 4 elements which make up 'the public or section of the public?'
a) the beneficiaries must be appropriate to the aims;
b) where the benefit is restricted to a section of the public it must not be unreasonably restricted;
c) people in poverty must not be excluded from the opportunity to benefit;
d) any private benefits must be incidental.
1a) clear benefits- which case states that a political purpose is incapable of meeting this requirement?
National Anti-vivisection society v IRC
1b) related to aims- which case states that where there are incidental activities not related to the charitable aims, any public benefit which arises from this incidental activity will not count?
IRC v Oldham Training & Enterprise Council
1c) which case states that benefit must be balanced against detriment/harm?
National anti-vivisection society v IRC- the detriment to medical research would outweigh the moral benefits.
2a) beneficiaries appropriate to aims- what is the rule regarding the number of people who can benefit?
the number of people who can potentially benefit must not be negligible.
2b) restricted section of the public- which case states that a bridge for the benefit of methodists in particular area was unreasonable because there was no justification for it?
IRC v Baddeley [1955]
What 3 types of restrictions are possible?
1) geographical restrictions- as long as they are not too small.
2)based on charitable need.
3) based on personal characteristics- depending on the aims that are being carried out.
Which case states that the 'personal nexus test' as displayed in Oppenheim v Tobacco Securities Trust has NO application to trusts for the relief of poverty?
Dingle v Turner [1972]- a trust to pay pension to 'poor employees' of the company dingle & co was valid.
Which case states that a restriction must not be based on the ability to pay any fees charged?
Re Resch's Will Trusts - however, a service which is provided mainly for those who can afford to pay does not necessarily mean it will not satisfy the public benefit requirement.
2c) people in poverty must not be excluded from opportunity to benefit- what is the key point in deciding the scope of this rule?
the context and aims of the charity are important in deciding who 'people in poverty' are.
2d) which case states that private benefits must be incidental?
London Hospital Medical College v IRC [1976]- private benefits will be incidental when:
1) they directly contribute to achieving the charity's aims;
2) they are a necessary result of carrying out the charity's aims.

Cy Pres - s.67, CA 2011

Applies to gifts that fail as it is impossible or impractical to give rise to D's intention. Thereby the courts can approve of the application of the trust as close as possible the donor's original intention.




must show:




- it is impossible or impractical to carry out settlor's purpose; or there is a surplus of funds after the purpose is fulfilled; and the settlor had general charitable intention - Re Lysaght





Initial Failure

If the gift fails outright it must be shown that the settlor had general charitable intention.




if settlor identifies a specific organisation the intention is not generally charitable. If not GCI can be found - Re Harwood




- if individuals are identified, no GCI - Re Spence


- if a non-existent body, yes GCI - Re Rymer


- unincorporated association - yes GCI - Re Finger's Will Trust


- work carried out by another after dissolved, yes GCI - Re Vernon's Trust


- language excludes the interpretation, no GCI - Biscoe



Subsequent Failure

The charitable body exists when the gift is vested then fails - property will go to the crown who will apply for analogous purposes - Re Slevin