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Charitable Trusts Notes

BCL Law Notes > Irish Trusts Notes

This is an extract of our Charitable Trusts document, which we sell as part of our Irish Trusts Notes collection written by the top tier of University College Cork students.

The following is a more accessble plain text extract of the PDF sample above, taken from our Irish Trusts Notes. Due to the challenges of extracting text from PDFs, it will have odd formatting:

CHARITABLE TRUSTS: TOPIC 5.
 Per Gavan Duffy J. in Re Howley's Estate [1940] IR 109.
"Charity is in law an artificial conception, which during some 300 years, under the guidance of pedantic technicians, seems to have strayed rather far from the realm of plain common sense".
 Irish Law on Charitable trusts has gone through some significant changes in recent times which stemmed on foot of the enactment of the Charities Act 2009 which its main provisions came into play in 2014.
 This Act was the first attempt by the legislature to define what a charitable trust was and put it on statutory footing. These trusts are enforced by the Attorney General and the
Charities Regulatory Authority.
 Charitable trusts are afforded many advantages under the Act:

1. They can exist in perpetuity.

2. Various tax advantages.

3. Objects of the trust need not be certain; Moggride v. Thackwell.
 Merrins v. AG; is a case which illustrates something which occasionally happens where property is just left to the charity and no trust was created, in these cases the government applies it to charity under the signed manual procedure.
 Advantages given the charitable trusts are overly complicated as the courts will now take into account financial implications when dealing whether to accept a new purpose as a charity.
 The 2009 Act was quite the development in Ireland in this area of law however, it is not without elements which are too technical and artificial, especially revolving around the definition of charity, and as of today we see need to look to the developments outside of the Charities Act 2009.
 The modern definition still refers back to the English Charitable Uses Act 1601 to which we applied in the Preamble of the Charitable Uses Act 1634.
 The classification of Charitable Trust is found in s.3(1) of the Act and mirrors the 4 principles established by Lord Mac Naughten in the case of Commissioners for Special
Purposes of Income Tax v. Pemsel, which are as follows;

1. Trusts for the relief of poverty.

2. Trusts for the advancement of education.

3. Trusts for the advancement of religion.

4. Trusts for other purposes beneficial to the community. CHARITABLE TRUSTS: TOPIC 5.
 S.3(2) of the Act further states that whilst falling into one of these 4 categories the trust will also need to be for the public benefit, which does not vary between the different categories.
 On foot of this, it is of the utmost importance to discuss the public benefit provisions provided in the Act.
o S.3(3) allows for great flexibility in interpreting the meaning of public benefit,
a gift will be regarded for the public benefit if it is intended to benefit individuals of the public.
o S.3(11) benefit to the public, it is necessary for the court to be satisfied that they are charitable in the required technical sense of the law. This section also lays out a non-exhaustive list of things which may be classified as a benefit to the community to act as guidance for the court.
o S.3(7) provides factors which should be taken into account when deciding whether a gift can be classed as a public benefit. So here account of a limitation imposed by the donor on the class of persons who may be of benefit from the gift and if this is justified and reasonable.
o S.3(7)(b) will also account for "any charge payable for a service provided in furtherance of the purpose of which the gift is given and whether it is likely to limit the number of persons or classes of person who will benefit from the gift".
o S.3(8) provides for a limitation referring to s.3(7), which will not be justified reasonably if the intended beneficiaries to the gift have a personal connection to the donor

Lord Greene MR in Re Compton "Personal Nexus Test" "[a] gift under which the beneficiaries are defined by reference to a purely personal relationship to a named propositus, cannot on principle be a valid charitable gift".

Trusts for Mixed & Non-Charitable Purposes:
 Chicester Dioceasan Fund v. Simpson- gift was for such charitable purposes as the trustees may see fit. Trust may be invalid if it might include non-charitable purposes.
 S.49(1) of the Charities Act 1961: In Ireland this section of the Act provides that, is food charitable are non-charitable objects are included comma the non-charitable CHARITABLE TRUSTS: TOPIC 5.
objects are to be excluded. You just read the child to be purposes so the trust would fail on foot of the non-charitable element.
 Interesting Irish case of Daly v. Murphy: Here there was a gift to the executor for around 650,000 euros and the executor could apply it for the purposes he sees fit.
o S.49(1) of the Act was applicable here and all non-charitable purposes were excluded, thus in term saving the gift.
o Here the judge looked to extrinsic evidence of the testator's intentions and the intentions were found to concern both non-charitable and charitable purposes.
 Thus, there is a need for some charitable flavor to be evident in cases to save any potential gifts.
 S.49(2) affirms this point where only the charitable purpose in the gift will be upheld the separate non-charitable purpose will not be upheld.

4 TYPES OF CHARITABLE TRUSTS:

1) Trusts for the prevention or relief of poverty or economic hardship.
 Poverty has been held to be a relative term so that so called "genteel" poverty could be covered and notes in Re Coulthurst where it was stated that "Poverty does not mean destitution".
 Contrast this view with the case of Re Sander's Will Trust: where a gift to provide housing for the working classes were held not to be charitable, because these people has jobs and weren't poor.
 Re Gwyon: unusual case, whereby a Rev left a substantial fund to set up a foundation to provide clothes to the boys of Farnham & district. This case didn't exclude boys who were not poor and in fact it excluded those who were in receipt of other charitable relief, and on foot of this the trust failed.
 This category has been expanded upon in s3(1) of the Charities Act 2009 in Ireland.
 The preamble of the Irish Statute uses the phrase "poor, succcourless, distressed or impotent persons", the English statute provides for "aged, impotent or poor". As result, it is clear those whom are disabled may also be classed in this category due to the use of the term "impotent"
 In addition, S.3(1) of the Act also states that trusts for "economic hardship" are also classed as charitable trusts.

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