An overview of the Court of Session’s recent decision on charitable status

A Scottish court decision last week could have significant implications for social enterprises in applying for charitable status. The New Lanark Trust’s application for charitable status for its two trading subsidiaries was refused, in 2018, by OSCR – on the grounds that the subsidiaries’ activities were "not in furtherance of charitable purposes and…… did not meet the public benefit element of the charity test". This has now been overturned by a Scottish court. OSCR has acknowledged that the court’s decision will bring greater clarity to the assessment of public benefit in the charity test. On the surface, this decision may well give many social enterprises a bit more leeway in what trading activities are deemed as ‘furthering charitable purposes’ etc. However, another possibility is that it may also open the door to other ‘social’ businesses looking to reap the benefits of charitable status. Charity Law specialist, Alan Eccles (BFK Solicitors) has written this blog on the New Lanark Trust ruling.