Key points

• charitable trusts are different from private trusts;

• charitable trusts must be exclusively charitable;

• charitable trusts enjoy a number of advantages;

• a charitable trust must satisfy certain requirements;

• the definition of a charitable trust is laid down in the Charities Act 2006;

• the definition of charity now comprises thirteen different heads of charity;

• all charitable trusts must satisfy the public benefit requirement; and

• if a charitable trust fails the funds may be transferred to another charity under the rules of cy près.

Introduction to charitable trusts

Charitable trusts are public trusts which carry a number of advantages. They are enforceable by the Attorney-General.

The advantages of charitable status

There are a number of advantages of having charitable status. Charities have always been regarded as beneficial to the public so the law has treated them in a more lenient way than private purpose trusts. The most significant of the advantages lie in the more lenient rules on taxation.