Charitable status or not?

Because the activities of Trusts are frequently charitable, many apply for charitable status - so that they are operating through a charitable company.

This provides some tax advantages, a public identity which assures their probity, and also enables the Trust to apply to charitable foundations for funding.

However, since some Trusts also aim to earn income through trading activities, and there may be limits on what they can do as a charity, they frequently set up subsidiary trading companies which can covenant profits back to the main charitable company.

All charities in Scotland work within the rules and regulations of the Charities and Trustee Investment (Scotland) Act 2005 and are monitored by OSCR, the charity register.

Charities must produce an annual return to OSCR and all trustees must meet specific obligations.