Charity Law

INTRODUCTION

This is intended to be a brief summary of the basic

principles of Cayman Islands' charity law. In the absence

of any authority to the contrary, principles of Cayman Islands

Charity Law are likely to follow English law principles.

DEFINITION OF CHARITY

English Charitable Uses Act 1601

There is no statutory definition of "charity".

English case law has established four "heads" of

charity. The purposes will be treated as charitable in that if

they fall within one or other of those heads and are within the

"spirit and intendment" of the preamble to the

English Charitable Uses Act 1601. The purposes set out in that

preamble (being examples but not the only objects of charity)

are:

"The relief of aided, impotent and poor people,

the maintenance of sick and maimed soldiers and mariners,

schools of learning, free schools and scholars in

universities, the repair of bridges, ports, havens,

causeways, churches, sea-banks and highways, the education

and preferment of orphans, the relief, stock or maintenance

for houses of correction, the marriage of poor maids, the

supportation, aid and help of young tradesmen, handicraftsmen

and persons decayed, the relief or redemption of prisoners or

captives, the aid or ease of any poor inhabitants concerning

payment of fifteens, setting out of soldiers and other

taxes".

The four "heads" of charity

It is generally accepted that the current statement of

English law is set out by Lord MacNaghten in the 1891 case of

Commissioners for Special Purposes of Income Tax v

Pemsel, namely:

"Charity in its legal sense comprises four

principle divisions; trusts for the relief of poverty; trusts

for the advancement of education; trusts for the advancement

of religion; and trusts for other purposes beneficial to the

community, not falling under any of the proceeding

heads".

A Cayman Islands' Grand Court decision (subsequently

upheld by the Privy Council on appeal in Attorney

General v Wahr-Hansen [2000] CILR 391) has held

that this 1891 classification will apply in the Cayman

Islands.

CHARITABLE ACTIVITIES

The law on what is charitable, within the four heads of

charity is continually evolving to meet the changing needs of

society. In the UK, the Charity Commission which is responsible

for the registration and regulation of charities in England and

Wales has a key role in defining what activities are to be

considered charitable in the twenty-first century within the

legal principles laid down by the Courts. To this...