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Are Benevolent Funds Charitable?

PLEASE NOTE: Information in this article is correct at the time of publication, please contact DFA Law for current advice on older articles.

A benevolent fund is a fund that exists to benefit people who are linked together in a specific way – normally through a relationship with a particular company or person.

 Recently, the Upper Tribunal (the senior court for ruling on tax issues) has been asked by the Attorney General to rule on whether benevolent funds have the necessary degree of public benefit required for charitable status to apply.

 The issue is whether the funds exist to help a sufficiently wide spectrum of society. If the ruling is that they do not, hundreds of benevolent societies may lose their charitable status unless they are willing to change their rules to enable benefits to be granted to a wider range of people. They may also face considerable tax charges if they are deemed not to be charitable organisations.

 A ruling is expected in 2012. If you are a trustee of a benevolent association, now is the time to start thinking about the possible consequences of loss of charitable status.

 Contact us if you would like advice on this matter.


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