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HMRC internal manual

Inheritance Tax Manual

General outline: established for charitable purposes

A charity is established for charitable purposes if it meets the definition in the Charities Act 2006/section 2. It must exist for a purpose as described and meet a public benefit test.

The description of purposes includes:

  • the prevention or relief of poverty,
  • the relief for those in need by reason of youth, age, ill-health, disability or financial hardship,
  • the advancement of education, religion, health, citizenship, community development, arts, culture, heritage, science, amateur sport, human rights, conflict resolution, religious or racial harmony, equality and diversity, environmental protection, animal welfare, and
  • the promotion of the efficiency of the armed forces or emergency services.

The word ‘charitable’ in IHTA84/S23 (6) has its technical legal meaning. The determination of charitable status is a matter of general law and, to be accepted as a charity for tax purposes, a body or trust must be a charity in law. So a gift to a needy individual, even if made with charitable motives, is not a gift for charitable purposes within the meaning of the subsection.

A gift for benevolent purposes is not a good charitable gift, because such purposes go beyond the legal definition of charities (Att Gen for New Zealand v Brown [1917] AC 393 PC. In Scotland, see Jackson’s Trs v Ld Adv [1926] SLT 358).