Schemes are a distinctive feature of charity law. A scheme may be: • a cy-près scheme which involves altering a charity’s purposes, or • an administrative scheme which alters its administrative provisions A scheme may be made: • by the Attorney General under the Royal Sign Manual where no trust exists, or • otherwise, by either (a) the Charity Commission or (b) the Court Different types of schemes Administrative scheme The court has an inherent equitable jurisdiction to regulate the administration of a charity without altering its purposes by way of an ‘administrative scheme’. An example of this type of scheme is provided by J. W. Laing Trust. This related to a scheme enabling the trustees for the time being to be discharged from an obligation to distribute capital within 10 years of the settlor’s death in exercise of the inherent jurisdiction of the court, with Peter Gibson J finding that the requirement was ‘inexpedient in the very altered circumstances of the charity’. The jurisdiction arises as ‘a branch of the court’s inherent jurisdiction in relation

Charity definition For the purposes of the law in England and Wales, charity means an organisation 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. Charitable purpose is a purpose which falls within subsection 3(1) of the Charities Act 2011 (CA 2011) and is for the public benefit. Charitable purpose CA 2011, s 2 defines a charitable purpose as one that falls within a list of thirteen descriptions of purposes in CA 2011, s 3 and is for the public benefit. This updates the common law based on the preamble to the Charitable Uses Act 1601. That statement evolved into four categories of charity: • relief of poverty • advancement of education • promotion of religion • other purposes beneficial to the community in a way recognised as charitable The new list of purposes is: • the prevention or relief of poverty • the advancement of education • the advancement of religion • the advancement of health or the saving of lives

A trust for which the purposes are exclusively charitable.

FORTHCOMING CHANGE: The Trusts and Succession (Scotland) Act 2024 received Royal Assent on 30 January 2024 and represents the biggest overhaul of trust law in Scotland in over a century. Following the issuing of commencement orders, this Practice Note will be updated further to reflect this new legislation. The Scottish Government is working with the UK Government on the reserved issue of pension trusts before taking further forward the implementation of the wider Act. A trust is one of several legal structures which can be used to constitute a charity in Scotland. Charitable trusts, by their nature, are subject both to charity law and to trust law. Of around 25,000 charities on the Scottish Charity Register, around 2,900 are constituted as charitable trusts (2026 figures). Many charities are referred to as ‘trusts’ even though they are created as companies limited by guarantee, Scottish Charitable Incorporated Organisations (SCIOs) or are established by Royal Charter or Act of Parliament. This Practice Note deals with charitable trusts properly so called, and not with other vehicles

A bribe is a financial payment or other form of reward or advantage, whether direct or indirect, that is intended to induce or influence, or has the effect of inducing or influencing, an individual, company or public body to perform their functions, including business and public duties, improperly. For the avoidance of doubt, improper performance includes: • not acting in good faith • not acting impartially, and • not acting in accordance with

Private Client analysis: The third tranche of changes to charity law introduced by the Charities Act 2022 (CA 2022) came into force on 7 March 2024. Kirsteen Hook, partner (Charities) at Trethowans LLP explores the impact of these changes which are expected to save time, reduce administrative burdens and simplify processes.

Maintained by Adrian Shipwright and Julian Hickey at Burnell Chambers An investigation by HMRC of a charity would have once been of major concern, but while they are still concerning, HMRC now routinely select a number of charities each year to audit to ensure that the Gift Aid scheme is being administered correctly and the returns made are accurate. HMRC are at pains to point out that if a charity is picked it does not mean that they are concerned—although they obviously also have chosen charities that have given them concern. Clearly there are potential reputational issues associated with such an audit, but HMRC emphasise that such audits are focused to ensure the correct application of the rules: ‘7.1.1 HMRC selects a number of charities and Community Amateur Sports Clubs (CASCs) for audit to ensure that the Gift Aid Scheme is being used properly and that any repayment claims made are accurate. If your repayment claim is selected for a review, it does not necessarily mean that HMRC believes the claim is wrong or that there’s suspicion about

A charity may be involved in a construction project: • to fulfil its charitable objectives (eg the construction of social housing) • to provide office or other accommodation in support of its principal charitable purposes, or • as an investment opportunity General issues on construction projects Anyone who is commissioning a construction project needs to understand the following general issues: • the respective roles of the developer, professional advisers, contractors, sub-contractors and suppliers • the need for collateral warranties from, or rights under the Contracts (Rights of Third Parties) Act 1999 in relation to, key members of the professional and construction teams • the different procurement methods • the range of standard form construction contracts and appointments, and the usual amendments to them • the role of professional indemnity insurance, contractor’s all risks insurance and product liability insurance • the provisions of: ◦ the Housing Grants, Construction and Regeneration Act 1996 (Construction Act 1996) in relation to payments under construction contracts and the right to refer a dispute under a construction contract to adjudication ◦ the Construction (Design

Charities routinely process personal data relating to donors prospective supporters, beneficiaries, employees, trustees, volunteers, suppliers and other contracts. For obvious reasons, the information that charities hold is of critical importance to them, particularly in respect of fundraising and marketing, service delivery and administration. With modern legislation now affecting how such data is stored and disseminated this collection of data is subject to data protection and electronic marketing law. Charities must have an eye on their legal responsibilities in this regard. The concept of data protection is extremely wide but charities should be familiar with: • the Data Protection Act 2018 (DPA 2018) • the General Data Protection Regulation (EU) (Retained Regulation (EU) 2016/679 (UK GDPR)) • Privacy and Electronic Communications (EC Directive) Regulations 2003, SI 2003/2426 (PECR) • the Data (Use and Access) Act 2025 (DUAA 2025), which amended the UK GDPR, DPA 2018 and PECR The UK GDPR regime is the replacement to the preceding regime under the General Data Protection Regulation, Regulation (EU) 2016/679 (EU GDPR), following Brexit. The DPA 2018 was originally

There is no reason why a charity cannot appointment a manager to deal with its investments and general assets. In the case of Common Investment and Common deposit funds, there will be fund managers dealing with the everyday investment strategies in any event. Many charities just do not have the available personnel or skills to manage their investments and employ investment managers often on an 'execution only' and 'advisory' basis. This means that advisers, at their own discretion, will sell and purchase investments on behalf of the charity and advise generally on the strategy that should be used in much the same way as fund managers act on behalf of individuals. Alternatively, the charity may employ an adviser on a 'discretionary' basis. This enables the charity to set down its own investment policy but leave the day to day buying and selling to its adviser(s). With land a charity can, of course, manage its own portfolio but this is normally left in the hands of a skilled and experienced property manager. It

Improvements in global communications and the mass media have led to co-ordinated efforts, eg through the Disaster Emergencies Committee (DEC), to raise money to help the victims of natural and man-made disasters. The funds so raised are distributed for the most part through existing charities which have the infrastructure and contacts, and the expertise, to be able to apply them effectively. The charities’ own objects, which are usually for the relief (and prevention) of poverty and sickness, will normally be amply broad enough to encompass the provision of the basic necessities for survival such as rescue, food, medicine and shelter, which victims may require. There has also been a recent development among international animal welfare charities, who are able to use their existing funds for the purpose, to raise money to rescue and care for domestic animals or wildlife caught up in a disaster whose needs may not otherwise be a priority. Disasters can also happen nearer home and an appeal for funds for the victims of a natural disaster in the UK, or the effects of

Many charities will wish to invest in a manner which aligns with their purposes, and public pressure has often led to a need for charities to ensure that their investments have an ethical basis. However, whilst it may often be possible in principle for charity trustees to do this, it can cause significant difficulties from a trust and charity law perspective where those investments do not provide the best available return. This note sets out: a) a brief overview of ethical investments; b) the previous position in respect of charity trustees adopting an ethical investment policy (which remains an important consideration); and c) the updated position following the Butler-Sloss case. . What is an ethical investment? The main issue to answer is what is an 'ethical' investment? Previous guidance from the Charity Commission provided a useful broad definition: ‘Ethical investment is a wide phrase which is used to cover many different approaches to investment strategies. An ethical investment policy may involve looking for companies which demonstrate best practice in areas like environmental protection, employment and