Recent Developments and Future Directions
Edited by Myles McGregor-Lowndes and Kerry O’Halloran
Chapter 4: Public Benefit: The Long and Winding Road to Reforming the Public Benefit Test for Charity: A Worthwhile Trip or ‘Is Your Journey Really Necessary?’
1 Debra Morris INTRODUCTION Public benefit has always been an essential element in charities. It is this factor that distinguishes charitable trusts from private trusts, and it is the public benefit that is often said to justify the advantageous taxation treatment afforded to charities.2 In England and Wales,3 for example, the Charity Commission describes it as a kind of covenant that charities have with society: charities bring public benefit and, in their turn, are accorded high levels of trust and confidence and the considerable benefits of charitable status.4 As well as significant tax advantages and certain legal privileges, charities can access funds which others – even other voluntary organisations – cannot; volunteers and donors give, respectively, time and money. The English common law tradition has provided no statutory definition of charity. The starting point was the Preamble to the Statute of Charitable Uses 1601 (known as the Statute of Elizabeth). Though it has been repealed,5 it has remained of significance throughout the common law world. The Preamble set out the most typical charitable purposes of the time, ranging from the ‘relief of the aged, impotent and poor people’ to the ‘education and preferment of orphans’ and it has formed the basis for modern judicial pronouncements on how to establish a charitable purpose. The courts and, in England, the Charity Commission, have been much influenced by Lord Macnaghten’s attempt to distill the spirit of the Preamble by formulating it into clear guidance. In Commissioners for Special Purposes of Income Tax v...
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