Conservative Central Office v Burrell [1982] 1 WLR 522

Key point

  • Where a gift is made to an organisation that is not an unincorporated association, it can be made as part of an irrevocable mandate to an officer of the organisation which the donor appoints as agent


  • The inspector of taxes sought to tax the conservative party
  • Members of the party consisted of MPs and members of local constituency associations
  • It argued that the party was an ‘unincorporated association’ and that its profits were accordingly chargeable to corporation tax under section 238 (1) of the Corporation Taxes Act

Held (Court of Appeal)

  • The conservative party was not within the definition of an unincorporated association and thus was not taxable

Brightman LJ

Definition of an unincorporated association

  • Two or more persons bound together by contract for common purposes, not being business purposes, with mutual obligations, and rules to identify who controls it and its funds and terms upon which it can be joined or left
  • On the facts, there was nothing linking contractually and directly members of local constituency associations to MPs and, accordingly, the party lacked the characteristics of an unincorporated association for the purposes of the taxing statutes

Agency approach

  • The funds were paid to the treasurer of the party who had title to the money as agent for the donors, authorised to use the money for the purposes of the party
  • If a contributor pays money to the treasurer, the treasurer has clear authority to add the contribution to the mixed fund that he holds, at that stage the mandate becomes irrevocable
  • The contributor can sue the treasurer for misapplication of the mixed fund but cannot sue the succession of the treasurer, perhaps only the original treasurer can be sued for their malpractices
  • In the conservative party, the treasurers are impliedly authorised to hand over the funds to the central office
  • There is no need to use this construction in the case of gifts for unincorporated associations since it will take effect as an accretion to funds subject to contract
  • If it is a testamentary gift, the will directs the executor to appoint the treasurer as his agent


  • Note that where the donor is deceased and property is transferred as a testamentary gift under his will, the executor of his will is the principal, and he appoints the treasurer of the fund as his agent – this point comes up often in problem questions