Investment and finance

The issue of what to do with their funds is of significant concern to charities. It is not as simple as it may seem as they are regulated not only by the Trustee Act 2000 but also by the Charities Act 2011 and regulations and powers imposed by the Charity commission.

Charity investments—definitions

There does not appear to be a definition of 'investment' in the context of charities save that there is a legal meaning that is derived from case law that indicates that charities must, in order to meet the legal definition, be solely concerned to look at the financial return.

However, there is also the common law definition to consider and it is here that some confusion is engendered with the Charity Commission appearing to concede that when considering their investments charities do not need to concentrate solely on the proposed investment providing a financial return. The implication from this seems to be that in making an investment charities can also consider how their objects may be promoted by that investment. However, this approach is by no means certain and ,currently charities are bound to follow the

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All in? Court confirms when a settlement is 'made' for the purposes of excluded property (Accuro Trust (Switzerland) SA v The Commissioners for HMRC)

Private Client analysis: This case considered the meaning of 'relevant property' under the settlements regime of the Inheritance Tax Act 1984 (IHTA 1984) and, in particular, the time at which this definition is to be tested. The question arose as to whether the trustees of an offshore trust established by a non-UK domiciled settlor were subject to the UK settlements regime in respect of property added to the trust after the settlor became deemed domiciled in the UK, or whether they were exempt from such charges as the trust consisted solely of excluded property. The First-tier Tribunal (FTT) held that whether trust property is excluded property is based on the status of the trust at the time that it was established, not at the time that the property in question was added to the settlement. As a result, the trust in this case did consist solely of excluded property and no inheritance tax (IHT) charges arose as a result of either the ten-year anniversary or capital distributions. The FTT was also asked to consider whether their jurisdiction was appellate, or supervisory only. The FTT held that, while their jurisdiction was supervisory, the questions raised by the trustees were relevant in establishing whether HMRC had acted reasonably and that the outcome (ie that the paid IHT should be refunded and that no further IHT was due) would be the same in either case. Written by Katherine Willmott, senior associate solicitor at Foot Anstey LLP.

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