HC Deb 16 December 1952 vol 509 cc153-5W
47. Mr. J. Morrison

asked the Prime Minister whether he will now make available the report of the Committee of Inquiry into the Law and Practice relating to Charitable Trusts; and whether the Government accepts its recommendations.

The Prime Minister

I am making available to hon. Members in the Vote Office this afternoon the Report of the Committee under Lord Nathan's chairmanship which has been considering changes in the law and practice (except as, regards taxation) relating to charitable trusts in England and Wales.

The Government are grateful to Lord Nathan and to the other Members of the Committee for undertaking this heavy and complicated task. The Report as a whole is receiving the careful consideration of the Government, who will announce their decision upon their recommendations in due course.

The Government have, however, given urgent consideration to one aspect of the Report concerning imperfect trust instruments dealt with in Chapter 12, which is ancillary to the general problem, and have decided to introduce legislation dealing with it as soon as possible.

Following is a statement of the purport of the proposed legislation. 1. Subject to some minor differences which will appear in the later paragraphs of this statement, the Government accept in the main the proposals of the Committee set out in Chapter 12 of the Report for validating trust dispositions which authorise the application of property for both charitable and non-charitable purposes. They are not, however, satisfied that it is either right or necessary in the circumstances to make provision for the validation of trust dispositions for purposes which are wholly non-charitable. 2. The Government propose to introduce as soon as opportunity occurs a Bill, which, if Parliament approves, will make provision on the lines set out in the following paragraphs. 3. Broadly speaking, the Bill will validate dispositions of property which satisfy the following conditions:

  1. (a) that the disposition was made before 16th December, 1952;
  2. (b) that the disposition is in terms which authorise the application of the property for purposes that comprise both charitable and non-charitable objects;
  3. (c) that the disposition is invalid on grounds, such as remoteness or uncertainty, 155 which would not invalidate it if its objects were wholly charitable; and
  4. (d) that the disposition has been treated as valid.
4. From the passing of the Bill, property comprised in a disposition within its ambit will be made applicable by the Bill itself for charitable purposes only, unless a claim adverse to the disposition is successfully asserted in accordance with paragraph 5. The particular charitable purposes for which the property will thus be rendered applicable will be the purposes specified in the dispostion so far as they are charitable. 5. A person who apart from the Bill would have a right to recover property comprised in a disposition within the ambit of the Bill on the ground of the invalidity of the disposition will be left free to assert that right if—
  1. (a) at 16th December, 1952, the disposition has been in operation for less than six years (that is to say, either was made within six years before that date or was subject down to that date, or to within six years before that date, to a prior interest which absorbed the whole of the income or profits of the property) and
  2. (b) any necessary action has already been begun or is begun at any time before the expiration of a year from the passing of the Bill.
Subject as above, such rights will be extinguished by the Bill; except that provision will be made for any relaxation of the conditions mentioned at (a) and (b) which may be proper for safeguarding the position of persons who have been or are under disability or whose interests have been or are in reversion only. 6. Application before the passing of the Bill of property comprised in a disposition within the ambit of the Bill in accordance with the terms of the disposition will be treated as having been a proper application, and rights which would exist apart from the Bill either to render the persons by whom such application has been made personally liable on the ground of misapplication or to recover from any recipient of any of the trust property will be extinguished by the Bill. except in a case in which an action to assert such a right has been begun before 16th December, 1952. 7. Forestalling of the proposed protective provisions by actions brought between 16th December, 1952, and the passing of the Bill to assert rights falling within the classes of rights which the Bill is to extinguish will be met by provision for staying any such action at the passing of the Bill if it is then still pending or for restitution if it has been completed. 8. For the purposes of taxation, the effect of the Bill will be that dispositions falling within its ambit will become entitled to the normal relief available by statute to charitable bodies, but no right will be conferred to reclaim any payments of tax already made, whether by direct payment or by deduction.of tax.