Generally, speaking, the Commissioners will only consent to a Lease where the Lease is for full market value. In a lot of these cases, it is proposed by the Trust to lease the premises to the tenant at an undervalue. In that case, the Commissioners will only consent to the creation of such lease in either of the following cases:
-
The tenant is a registered charity who have registered as such with Revenue Commissioners and have a valid charity Number.
-
The purpose for which the lease has been created falls within the definition of charitable purpose as defined by Lord MacNaghten in Pemsels Case (Commissioners for Special Purposes of Income Tax .v. Pemsel) [1891]” A.C. 531.
In that case, a Charitable Trust was broadly classified as any purpose falling into 4 different categories which were as follows:
-
Advancement of religion
-
Advancement of Education
-
Relief of Poverty
-
Some other purpose beneficial to the community not falling under the above heads.
There has been considerable case-law in the early 1900’s both side of the Irish Sea casting different interpretations on the meaning of Lord MacNaghten’s definition of charitable purpose. In any event, in the absence of a statutory definition of charity purpose in any Act of the Oireachtas, this exposition by Lord MacNaghten has been broadly accepted as delineating the boundaries of a charity. However, an examination of the case law to date indicates that it is also a requirement that to qualify as charitable, the purpose of the trust must import PUBLIC BENEFIT. In other words, the purpose of the trust must not be restricted to a specified group of persons. There are some exceptions to this requirement which are beyond the scope of this document.
In the eventuality that the purpose of the lease comes within the Pemsel Definition, then it may be possible to procure the consent of the Commissioners to this lease at a nominal rent. However, it is the duty of the proposed tenant to specify how they meet the requirements as set out above.
In the event that this is not possible, then it will be necessary to grant the lease at full market value. In this case, the same considerations apply as would apply to a sale of property.
The copyright in the above sections is the property of Mary McAveety, Solicitor, Main Street, Ballyconnell, Co. Cavan. No part of this may be reproduced or transmitted in any form by any means, including photocopying and recording, without the written consent of the author. Such written permission must also be obtained before any part of this document is stored in a retrieval system of any nature.
Parish Finance & Pastoral Committee Approval
