Charity investment - definitions

Copyright © 2025 LexisNexis
Published by a LexisNexis Private Client expert
Practice notes

Charity investment - definitions

Copyright © 2025 LexisNexis

Published by a LexisNexis Private Client expert

Practice notes
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Most charities will have some form of liquid assets and a desire to maximise the investment potential of those assets. In this context, it is essential that trustees are aware of what they can and cannot do in respect of investment. The term 'investment' is generally defined as any asset that produces income but it has to be distinguished from the term 'income' used in trust law which would exclude capital gains. With charities the term can include income in the conventional sense as well as capital gains.

Definition of investment

Rather oddly, the main legislation dealing with investment in a trust\charity context, the Trustee Act 2000 (TrA 2000), does not define the term investment.

Currently, the legal meaning of 'investment' is limited to its statement in Harries v Church Commissioners as:

property held by the trustees for the purpose of generating money, whether income or capital growth, with which to further the work of the trust

The judgment went on to use the phrase 'best financial return….appropriate to risk'. Having reviewed all the evidence the Charity

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Jurisdiction(s):
United Kingdom
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Key definition:
Charity definition
What does Charity mean?

A charity is an institution which is established for charitable purposes only and falls to be subject to the control of the High Court in the exercise of its jurisdiction with respect to charities (Charities Act 2011, s 1)

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