FLK2 · Trusts

Purpose & charitable trusts

SQE1 revision notes — the key rules, leading cases and common traps for this topic, in plain English and current to 2026.

TR.04 — Purpose & Charitable Trusts

The starting point: the beneficiary principle

A private trust must have a beneficiary who can enforce it (Morice v Bishop of Durham). A trust for an abstract purpose generally fails — no one can compel the trustees. Purpose trusts also risk failing for uncertainty of objects and for breaching the rule against perpetuities/inalienability (no human life to measure against; capped at 21 years if valid).

Exceptions — valid non-charitable purpose trusts

A narrow category of "trusts of imperfect obligation" survive (Re Endacott): tombs/monuments, specific animals, saying private masses. These are not invalid but unenforceable; trustees may carry them out. They must satisfy the 21-year perpetuity rule and certainty.

Trap: Re Denley — a trust expressed as a purpose but conferring a direct, tangible benefit on ascertainable individuals (e.g. a sports ground for employees) can be valid as it effectively has beneficiaries. Distinguish from abstract purposes.

Charitable trusts — the three requirements

A trust is charitable (and escapes the beneficiary principle and perpetuity rules) only if it:

has a charitable purpose within s.3 Charities Act 2011 — twelve specific descriptions (e.g. prevention/relief of poverty, advancement of education, religion, health, citizenship/community development, arts, amateur sport, environmental protection, animal welfare) plus an "any other purposes" catch-all (13 in total);
is for the public benefit (s.4); and
is exclusively charitable (s.1).

Public benefit

Two limbs (ISC v Charity Commission): (i) genuine, identifiable benefit; (ii) benefit to the public or a sufficient section of it.
Poverty is special: a trust to relieve poverty can be valid even among a narrow class (e.g. poor relations/employees) — the personal-nexus rule is relaxed (Dingle v Turner).
Education/other heads: a class defined by a personal nexus (e.g. employees of one company) fails the "section of the public" test (Oppenheim v Tobacco Securities).

Key distinctions and traps

"Charitable OR benevolent" = fails (not exclusively charitable). "Charitable AND benevolent" = valid.
Political purposes (changing law/policy) are not charitable (McGovern v Attorney General).
Cy-près: if a charitable purpose fails, funds can be applied to a similar purpose (general charitable intention needed for initial failure; not required for subsequent failure; Charities Act 2011 ss.61–67, the core occasions being in s.62).
Charitable trusts: no perpetuity period on duration, may be perpetual, enforced by the Attorney General / Charity Commission.

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A woman is the treasurer of a small amateur football club. Members pay £20 each month in cash. Under the club rules she accepted on becoming treasurer, she must bank the subscriptions into the club's dedicated account within seven days. One month she receives £200 in subscriptions and spends the cash on her own gas bill that same day. She intends to replace the money from her wages before anyone notices, and pays an equivalent £200 into the club account two weeks later. Which statement best explains how section 5(3) of the Theft Act 1968 applies to the subscriptions when she pays the gas bill?

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