ABSTRACT
By virtue of the Charities Act 2006 a purpose is treated as charitable if it satisfies two requirements: the purpose must be exclusively charitable and must satisfy the public benefit test, see s 2 of the Charities Act 2006. Prior to the Charities Act 2006, purposes were treated as charitable were those mentioned in the preamble to the Charitable Uses Act 1601 and those which, by analogy, were within the ‘spirit and intendment’ of the preamble. These purposes were classified under four heads by Lord MacNaghten in Inland Revenue Commissioners v Pemsel [1891] AC 531. These are trusts for: (a) the relief of poverty; (b) the advancement of education; (c) the advancement of religion; and (d) other purposes beneficial to the community. Today, s 2(2) of the Charities Act 2006 lays down a description of 13 heads of charities which is intended to comprise an all inclusive definition of charitable purposes. This comprises the first statutory definition of charitable purposes and is heavily reliant on the vast body of case law on the subject. At common law the public benefit test may be satisfied if the beneficiaries are not numerically negligible and there is no personal nexus between the donors and the beneficiaries, or indeed between the beneficiaries themselves. This common law principle has been preserved by s 3(3) of the 2006. However, the common law presumption in favour of public benefit regarding trusts for the relief of poverty, advancement of education and religion has been repealed: see s 3(2) of the Charities Act 2006. The Charity Commission has the task of promoting understanding and awareness of the operation of the public benefit requirement.
