Commissioners of Inland Revenue v City of Glasgow Police Athletic Association
| Jurisdiction | Scotland |
| Judgment Date | 09 March 1953 |
| Date | 09 March 1953 |
| Court | Court of Session (Inner House - First Division) |
COURT OF SESSION (FIRST DIVISION)-
HOUSE OF LORDS,
Income Tax - Exemption - Charitable purposes - Police Athletic Association - Finance Act, 1921 (11 & 12 Geo. V, c. 17), Section 30 (1) (c); Finance Act, 1927 (17 & 18 Geo. V, c. 10), Section 24.
The Association was formed in 1938 "to encourage all forms of athletic sports and general pastimes". Membership of the Association is restricted to officers and ex-officers of the City of Glasgow Police Force and is voluntary, 85 per cent. of the members of the Force belong to it. The Association is administered by the members themselves, each member paying an annual subscription to the Association. Funds are also raised by holding an annual sports meeting.
On appeal against the refusal by the Commissioners of Inland Revenue of a claim by the Association under Section 30 (1) (c), Finance Act, 1921, as amended by Section 24, Finance Act, 1927, for exemption from Income Tax of the profits of the annual sports meeting, the Special Commissioners decided that, while the Association's object was not, per se, a charitable object, there were special factors in the nature of a police force which enabled them to hold that the Association was a body of persons established for charitable purposes only, and they allowed the claim. The Crown demanded a Case.
The Court of Session held that the question whether the Association was established for charitable purposes had-see Special Commissioners of Income Tax v. Pemsel, 3 T.C. 53-to be decided in accordance with English law, and the Court could not decide that the decision of the Special Commissioners was contrary to the law of England. The Crown's appeal was accordingly dismissed.
The House of Lords held that the English law of charity had to be regarded for Income Tax purposes as part of the law of Scotland and not as a foreign law; and (Lord Oaksey dissenting) that the Association was not established for charitable purposes only.
Stated for the opinion of the Court of Session as the Court of Exchequer in Scotland by the Special Commissioners of Income Tax, under the Income Tax Act, 1918, Section 149, and the Finance Act, 1925, Section 19 (3).
I. At a meeting of the Commissioners for the Special Purposes of the Income Tax Acts held at Glasgow on 6th April, 1951 for the purpose of hearing appeals the said Commissioners, pursuant to Section 19 (3) of
the Finance Act, 1925, heard and determined a claim by City of Glasgow Police Athletic Association (hereinafter called "the Association") for exemption under Section 30 (1) (c) of the Finance Act, 1921, as amended by Section 24 of the Finance Act, 1927, from Income Tax under Schedule D in respect of the profits of a trade, namely, the holding of annual sports, carried on by the Association. The grounds of the claim were that (a) the Association was a charity, as defined by Section 30 (3) of the Finance Act, 1921, namely "a body of persons or trust established for charitable purposes only," (b) the profits of the said trade were applied solely to the purposes of the Association and (c) both of the conditions of paragraph (c) of Sub-section (1) of Section 30 of the Finance Act, 1921 (amended as aforesaid) were satisfied, namely, (i) the trade was exercised in the course of the actual carrying out of a primary purpose of the Association and (ii) the work in connection with the trade was mainly carried on by beneficiaries of the Association.At the hearing of the said claim it was conceded on behalf of the Appellants (a) that the profits of the said trade were applied solely to the purposes of the Association and (b) that if the Association was a charity, as above defined (which was denied), the above condition (ii) was satisfied, namely the work in connection with the trade was mainly carried on by beneficiaries of the charity, with the result that the Association would be entitled to the exemption claimed, and the issue before us, the Commissioners, was accordingly confined to the question whether the Association was a body of persons or trust established for charitable purposes only.
II. Evidence in support of the claim was given before us by Mr. James Robertson (Assistant Chief Constable of Glasgow), Sergeant T. Gourlay (City of Glasgow Police, and honorary treasurer of the Association) and Detective Sergeant H.F. Thomson (City of Glasgow Police, and honorary general secretary of the Association), and the documents hereinafter mentioned were put in evidence before us. The facts found by us on the evidence (oral and documentary) are as hereinafter set out.
-
(2) Prior to 1938, there were various clubs connected with the City of Glasgow Police. In February, 1938, these clubs were merged in the Association which was established at that date with the purpose of co-ordinating the various athletic and sporting activities of the members of the police force.
-
(3) A print of the membership card of the Association, containing the constitution and general rules of the Association is hereto annexed, marked "A," and forms part of this case(1).
-
(4) Rule 1 provides that:
The Association shall be called the "City of Glasgow Police Athletic Association."
(5) Rule 2 provides that:
The objects of the Association shall be to encourage and promote all forms of athletic sports and general pastimes.
(6) Rule 3 provides:
Officers.-The Officers shall consist of the following:-President, Vice-President, Hon. General Secretary and Hon. Treasurer, who shall be members of the Association. The Chief Constable shall be President and the Assistant Chief Constables and Superintendents of the Force shall be Vice-Presidents.
(7)
(8) (The Rule then makes provision for the election of the hon. general secretary and the hon. treasurer.)
(9) Rule 4 provides:
The Management of the Association shall be vested in an Executive Committee, Divisional activities by a Divisional Committee, and each branch of sport or pastime by a Sectional Committee. The composition of these Committees is as detailed in Rule 5. There shall be the following Sections, viz.:-Angling, Athletics, Badminton, Billiards, Bowls, Boxing and Wrestling, Cricket, Football, Golf, Rugby, Shooting, Swimming and such other sections as the Executive Committee may approve.
(10) Rule 5 deals in detail with the constitution of the executive committee, divisional committees and sectional committees.
(11) Rule 6 provides for the holding of an annual general meeting and the business to be transacted thereat.
(12) Rule 7 deals with financial matters, generally.
(13) Rule 8 provides:
Membership.-Ordinary membership shall be restricted to Officers and ex-Officers of the City of Glasgow Police Force.
(14) Rule 9 provides:
Honorary Members-the Executive Committee may elect honorary members.
(15) Rule 10 provides that the subscriptions for each serving member shall by 3d. per week, and that the subscription for ex-members of the Force shall be 5s. per annum.
(16) Rule 11 provides:
Members to be Amateurs.-The members of the various clubs or sections of the Association must be amateurs as defined by the laws of the sport or pastime concerned.
(17) Rules 12 to 20 provide for the various matters therein mentioned, and Rule 21 provides:
Alteration of Rules.-None of the foregoing Rules shall be altered or revoked save by a two-thirds majority of those present at the Annual General Meeting or at a Special Meeting called for the purpose.
(18) Rule 22 makes provision for the convening of a special general meeting.
(19) Rule 23 provides:
Sanction of Chief Constable.-All resolutions and decisions passed at all meetings of the Association are subject to the approval of the Chief Constable.
(20) Membership of the Association is open to any serving member of the City of Glasgow Police Force on a voluntary basis, and until the year 1947, membership of the Association was a condition of service for all new entrants to the Force. This condition of service was abolished in 1948. Since membership became voluntary all recruits have joined the Association. The present membership is approximately 85 per cent. of the entire force.
(21) Under rule 9 membership is also open to ex-members of the force. The retiring age for sergeants and constables is 55 and for inspectors and superintendents 60. At 30th September, 1950, only nine ex-officers of the force remained members of the Association. Ex-officers make very useful coaches.
(22) As provided by rule 10, the membership subscription is 3d.per week for serving officers and 5s. per annum for ex-officers.
(23) Pursuant to rules 4 and 5, the management of the Association is vested in an executive committee, which is comprised of a representative from each police division, one from each sporting or athletic section, an honorary secretary, an honorary treasurer and two vice-presidents who are appointed by virtue of their rank as superintendents or assistant chief constables. By virtue of rule 23, the decisions of the committee are subject to the approval of the Chief Constable, who is thus in a position to bar anything which he may consider inimical to the best interest of the force.
(24) Divisional activities are managed by divisional committees, and each branch of sport or pastime by a sectional committee. In addition to the sections specifically mentioned in rule 4 there are also sections for table tennis, photography and art. Competitions with the outside public are arranged by the sectional committees. The table tennis section competes exclusively with outside clubs. The photographic and art sections have their own committees and their own annual exhibition. There is no special section for social activities, which are confined to each of the eight divisional committees. Dances are organised by divisional committees. There is no section committee for dances. Each division runs a dance about once in every...
To continue reading
Request your trial