Guild v IRC
Encyclopedia
Guild v IRC was an English trusts law
case dealing with charitable trusts
which confirmed that recreational facilities open to the public could be valid charities. Guild was the executor of the estate of James Russell, who left his estate "for the use in connection with the sports centre in New Berwick or some similar purpose in connection with sport". The Inland Revenue held that the trust created did not constitute a charitable trust, and as such was subject to the Finance Act 1975. Since the Income and Corporation Taxes Act 1970
interpretation of "charity" was to be used, English trusts law was applied.
After an initial hearing in the Court of Session
, the case was appealed to the House of Lords
, consisting of Lord Keith of Kinkel, Lord Roskill, Lord Griffiths, Lord Jauncey of Tullichettle and Lord Lowry
. Judgment was issued on 27 February 1992, with the sole opinion being given by Lord Keith. Keith applied the Recreational Charities Act 1958
, which provides that recreational facilities providing "social welfare" to people from social disadvantages or the general members of the public were appropriate charitable trusts. The question was whether the "social welfare" element also applied to recreational facilities open to the general public. Keither rejected this, holding that "I would therefore reject the argument that the facilities are not provided in the interests of social welfare unless they are provided with the object of improving the conditions of life for persons who suffer from some form of social disadvantage. It suffices if they are provided with the object of improving the conditions of life for members of the community generally...if it suffices that the facilities are to be available to the members of the public at large...it must necessarily be inferred that the persons for whom the facilities are primarily intended are not to be confined to those who have need of them by reason of...social deprivation". The impact of this case was to confirm that the courts accepted the validity of recreational charitable trusts open to the public.
English trusts law
English trusts law is the original and foundational law of trusts in the world, and a unique contribution of English law to the legal system. Trusts are part of the law of property, and arise where one person gives assets English trusts law is the original and foundational law of trusts in the...
case dealing with charitable trusts
Charitable trusts in English law
Charitable trusts in English law are a form of express trust dedicated to charitable goals. There are a variety of advantages to charitable trust status, including exception from most forms of tax and freedom for the trustees not found in other types of English trust. To be a valid charitable...
which confirmed that recreational facilities open to the public could be valid charities. Guild was the executor of the estate of James Russell, who left his estate "for the use in connection with the sports centre in New Berwick or some similar purpose in connection with sport". The Inland Revenue held that the trust created did not constitute a charitable trust, and as such was subject to the Finance Act 1975. Since the Income and Corporation Taxes Act 1970
Income and Corporation Taxes Act 1970
The Income and Corporation Taxes Act 1970 was an Act of Parliament passed by the Parliament of the United Kingdom which was repealed in 1992.-Section 226 plans:...
interpretation of "charity" was to be used, English trusts law was applied.
After an initial hearing in the Court of Session
Court of Session
The Court of Session is the supreme civil court of Scotland, and constitutes part of the College of Justice. It sits in Parliament House in Edinburgh and is both a court of first instance and a court of appeal....
, the case was appealed to the House of Lords
Judicial functions of the House of Lords
The House of Lords, in addition to having a legislative function, historically also had a judicial function. It functioned as a court of first instance for the trials of peers, for impeachment cases, and as a court of last resort within the United Kingdom. In the latter case the House's...
, consisting of Lord Keith of Kinkel, Lord Roskill, Lord Griffiths, Lord Jauncey of Tullichettle and Lord Lowry
Robert Lowry, Baron Lowry
Sir Robert Lynd Erskine Lowry, Baron Lowry PC , often known as Robbie Lowry, was a Lord Chief Justice of Northern Ireland and a Lord of Appeal in Ordinary...
. Judgment was issued on 27 February 1992, with the sole opinion being given by Lord Keith. Keith applied the Recreational Charities Act 1958
Recreational Charities Act 1958
The Recreational Charities Act 1958 was an Act of the Parliament of the United Kingdom that recognised the place of "recreational facilities" within English law on charitable trusts. In trusts law, there are requirements that such trusts contain both a charitable purpose and public benefit...
, which provides that recreational facilities providing "social welfare" to people from social disadvantages or the general members of the public were appropriate charitable trusts. The question was whether the "social welfare" element also applied to recreational facilities open to the general public. Keither rejected this, holding that "I would therefore reject the argument that the facilities are not provided in the interests of social welfare unless they are provided with the object of improving the conditions of life for persons who suffer from some form of social disadvantage. It suffices if they are provided with the object of improving the conditions of life for members of the community generally...if it suffices that the facilities are to be available to the members of the public at large...it must necessarily be inferred that the persons for whom the facilities are primarily intended are not to be confined to those who have need of them by reason of...social deprivation". The impact of this case was to confirm that the courts accepted the validity of recreational charitable trusts open to the public.