The Acting Commissioner of Taxation has forwarded the following memorandum for advice:

I forward herewith copy of Notice of Objection lodged by the administratrix of the estate of Sir A.B., deceased.

There are two items which were claimed as deductions but were disallowed, viz.:

1. gifts of £1000 to the Grand Lodge of Freemasons;
2. the gift to the library of the Supreme Court.

The solicitors of the estate request that they be submitted to you for consideration.

With regard to the gift to Grand Lodge of Freemasons, it has been ruled under income tax that a Masonic Lodge is not a charitable institution. The present Grand Master has admitted this to me. If the objection be allowed, the income tax ruling is upset.

The gift of £210 to the Supreme Court library was disallowed, because the Supreme Court is not an educational institution within the meaning of the Act.

I shall be glad of your opinion whether-

1. the Grand Lodge of Freemasons is a charitable institution within the meaning of the Estate Duty Assessment Act; and
2. the Supreme Court is an educational institution within the meaning of that Act.

Section 8 (5) of the Estate Duty Assessment Act 1914 provides that estate duty shall not be assessed or payable upon so much of the estate as is devised or bequeathed or passes by gift inter vivos or settlement for religious, scientific, charitable or public educational purposes.

The term 'charitable' has a legal and a popular meaning, and the legal meaning is much wider than the popular meaning (see In re Wedgwood [1915] 1 Ch.113).

The legal meaning of 'charitable' was dealt with by the House of Lords in Commissioners for Special Purposes of Income Tax v. Pemsel [1891] A.C. 531, where Lord Macnaghten classified charities as of four classes:

1. trusts for the relief of poverty;
2. trusts for the advancement of religion;
3. trusts for the advancement of education; and
4. trusts for other purposes beneficial to the community not falling under any of the preceding heads.

The question to be decided depends on whether the term 'charitable' in the section 8 (5) has been used in its legal sense or in its restricted popular sense. It is to be noted that the section specifically refers to 'religious, scientific and public educational purposes' in addition to 'charitable purposes'. But in the legal meaning of 'charitable purposes', 'religious, scientific, and public educational purposes' are included (see judgment of Lord Macnaghten above referred to). If the legislature intended 'charitable' to have its wide legal meaning, there would have been no need to specifically use the words 'religious, scientific, and public educational', as these are included in the meaning of 'charitable'. The fact that the legislature has seen fit to use these words in addition to the word 'charitable' shows, I think, that it was intended that 'charitable' should not have its wide legal meaning, but should be restricted to its popular meaning.

What is the exact popular meaning of 'charity' or 'charitable' is hard to definitely define (see remarks of Lord Macnaghten at p. 583), but I think that it may be taken that a gift to the Grand Lodge of Freemasons would not popularly be considered a gift for charitable purposes. The Grand Lodge of Freemasons may itself subscribe to a number of charitable objects, but that would not make a gift to the Grand Lodge itself charitable in the ordinary meaning of the word.

In my opinion the gift to the Grand Lodge of Freemasons is not a gift for charitable purposes within the meaning of section 8 (5) of the Act.

As regards the gift to the library of the Supreme Court, I do not think that is a gift for public educational purposes. It is not such a gift in the ordinary meaning of those words, nor is it, in my opinion, a gift to an educational institution within the meaning of section 8 (8) of the Act.

[Vol. 15, p. 105]