What is a charitable trust?

A charitable trust or foundation is a legal organisation which can be set up by anyone who has decided that they want to set aside some of their assets or income for charitable causes either in their lifetime or on death or both. A charitable trust or foundation is registered charity and is governed by a trust deed which states the charitable purposes of that trust.

Setting up your own trust provides a framework for planning your charitable giving and gives you a greater say in how the money you give is directed to the cause you want to support.

You can choose what to call your trust and provide your charitable giving an identity. You can call it a ‘foundation’ or ‘charity’ or any similar term. You do not specifically have the call it a ‘trust’.

You do not need to appoint professional trustees and may choose members of your family or friends who share your passion for your chosen cause. Your appointed trustees decide how the income and capital (assets) of the trust should be distributed adhering at all times to the charitable purposes of the trust.

One of the main advantages is that because a charitable trust is a charity, it can receive money tax-free.

The trust will also be able to take advantage of many tax benefits in relation to income tax, corporation tax, inheritance tax, business rates (on office premises). The trust can continue after your death, and may be a beneficiary under the terms of your Will , ensuring that your favourite cause will continue to benefit after your death.

The rules and regulations surrounding charitable trusts are extensive. Seek our professional advice for further information.