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Attorney General v Charity Commission for England and Wales & 10 Ors (2012)


Charities and benevolent bodies whose objects were the relief of poverty for a restricted group of beneficiaries nevertheless met the express requirement in the Charities Act 2006, and in case law prior to the coming into force of the Act, that they be "for the public benefit" and were therefore charitable.


The reference was made when the first party Charity Commission became unsure as to whether the Act, which expressly required that charitable purposes be "for the public benefit", had the effect of depriving it of jurisdiction to regulate trusts and other benevolent bodies whose objects were the relief of poverty to a restricted group of beneficiaries. The essential questions were (i) whether a trust for the relief of poverty could be charitable if those who benefited from it were defined by their relationship to (a) an individual; (b) a company; or (c) an unincorporated organisation; (ii) whether the Act statutorily reversed pre-2006 legal authorities; (iii) whether the nature and extent of public benefit required in order for a trust for the prevention of poverty to be a charitable trust was the same as, or different from, the public benefit required of a trust for the relief of poverty. By the time of the hearing it was common ground that the Act did not cast doubt on the continued charitable status of organisations concerned with the prevention or relief of poverty (see para.22 of judgment). However, the court addressed issues of principle concerning the law of public benefit both before and after the coming into force of the Act.


(1) A trust for the relief of poverty amongst a class of potential beneficiaries who were defined by their relationship to an individual, their employment by a commercial company or their membership of an unincorporated association was capable in all three situations of being a charitable trust (paras 22, 35, Annex 2.1-2.3). There were two related aspects of public benefit: the first was that the nature of the charitable purpose had to be such as to benefit the community; the second was that those who benefited had to be sufficiently numerous and identifiable so as to constitute "a section of the public", R. (on the application of Independent Schools Council) v Charity Commission for England and Wales [2011] UKUT 421 (TCC), [2012] 2 W.L.R. 100 applied. It was therefore possible that a trust could be charitable even if it was not for the public benefit in the first sense, Gilmour v Coats [1949] A.C. 426 applied. The abolition of the presumption of public benefit in s.3(2) of the Act had had no impact on whether a trust for the relief of poverty was charitable or not. In deciding whether a trust was for the public benefit, a court would form its view on the evidence, not by way of assumption (paras 30-39). (2) There was nothing in the pre-2006 authorities which raised the slightest doubt that the first aspect of public benefit was necessary for a purpose to qualify as charitable. Nor was there anything in the authorities to lead to the conclusion that the first type of public benefit was a separate and distinct requirement which had to be satisfied if a purpose was to be charitable. Charity existed for the public benefit; an element of "public benefit" was that the nature of the purpose had to be one which was capable of being of benefit to the community. When deciding whether or not the public benefit requirement was satisfied, it could not be right to focus exclusively on the question whether the beneficiaries could be regarded as a section of the community, Attorney-General v Price 34 E.R. 1189, Scarisbrick's Will Trusts, Re [1951] Ch. 622, Gibson v South American Stores (Gath & Chaves) Ltd [1949] Ch. 572, Dingle v Turner [1972] A.C. 601 and Spiller v Maude (1886) L.R. 32 Ch. D. 158 (Note) considered (paras 40-62, Annex 2.4). (3) Trusts for the prevention or relief of poverty were not automatically charitable. Whether or not an institution satisfied the public benefit requirement had to be assessed by reference to the criteria which were relevant to its purposes. It did not make sense to consider the public benefit requirement under the Act in abstract, because what might be sufficient for one type of institution might not be sufficient for a different institution. Section 2(2)(a) of the Act combined "prevention" and "relief" into a single description of purpose, which was an indication that Parliament saw no real distinction between them (paras 63-64, 69-84). 

Judgment accordingly

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20 Feb 2012

Upper Tier Tax Tribunal
Warren J (President), Judge Alison McKenna

‚ÄčLTL 20/2/2012

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