Avoidance of simony and income tax

New legal advice clarifies that Common Tenure has resolved this potential problem

In January 2019, the Church of England General Synod Legal Advice Commission issued new advice Appointment of incumbent on non-stipendiary basis which updated its earlier opinion Clergy: non-stipendiary ministers: appointment as incumbents; in this, the Commission had identified a number of legal difficulties that arose where it was proposed to appoint a priest as an incumbent on the basis that he or she would not receive a stipend or any other profits of the benefice.

The principal difficulties identified by the Commission in 2001 were: 

a). that an arrangement under which a priest disclaimed in advance the financial entitlements which would otherwise attach to the incumbency amounted to simony with the result the presentation to the benefice would be void under section 4 of the Simony Act 1588; and

b). that an incumbent appointed on a non-stipendiary basis might remain liable for income tax on the income of the benefice even if he or she did not receive that income.

The advice explains these two issues:

“[3]. Simony includes the buying or selling of an ecclesiastical benefice or admission to a benefice. An agreement by a priest before presentation to give up a claim to some of the emoluments of the benefice is simoniacal: R v Bishop of Oxford (1806) 7 East 600. A presentation made in such circumstances is accordingly void under section 4 of the 1588 Act (and the simoniacal act is a criminal and an ecclesiastical offence). [See Halsbury’s Laws of England (2011) vol. 34, paragraphs 616 and 617].

[4]. As to income tax, the problem arose from the principle stated in Reade v Brearley (1933) 17 TC 687 that “in a large number of cases the voluntary foregoing of a salary due to a person ought to be regarded by the Court … simply as a being an application of the income and that in such circumstances, the office would not the less be an office of profit and the assessment [of tax] would therefore not the less be made”.

The Commission noted that this principle was not inexorable and that there were circumstances where a disclaimer of income could be effective for tax purposes but it was impossible to advise with confidence that an incumbent would escape liability to pay tax on the notional income of a benefice which he or she had elected not to receive.”

The Commission suggested that the matter as a whole could be clarified in the legislation that was expected to follow the review of clergy terms of service carried out in 2003 and 2004: i.e. the Ecclesiastical Offices (Terms of Service) Measure 2009 and the Ecclesiastical Offices (Terms of Service) Regulations 2009. An examination of regulations 3 and 11 [7 and 8] concludes:

“[9]. The effect of regulation 3, read with regulation 11, is that any office held under common tenure – which includes the office of incumbent … – may, if the statement of particulars so specifies, be an office in respect of which the holder is not entitled to a stipend. That alone should suffice to establish that the appointment of an incumbent on a non-stipendiary basis is now lawful.

[10]. Nevertheless, it is in any event clear that whatever may have been the position in the past, the appointment now of an incumbent on the basis that he or she will not receive a stipend is not a simoniacal act and is therefore not rendered void by section 4 of the 1588 Act.

[11]. Where a post that is to be held under common tenure – whether it is full- or part-time – is not one in respect of which the office holder is entitled to a stipend, an appointment to that post on that basis does not amount to an agreement by the priest to give up a claim to any emoluments of the office. The office simply does not have any emoluments in the form of stipend”.

Emoluments of benefices other than stipends have all been abolished by statute, as described in [12], and consequently “accepting appointment as an incumbent where the office holder is not entitled to a stipend, does not amount to the priest concerned agreeing to give up any emoluments of the benefice and the question of simony does not arise [13]”.

Similar considerations apply in relation to the issue previously identified by the Commission in relation to liability to income tax. If a priest is appointed to an office of incumbent and is not entitled to a stipend, there will be no earnings or other income attributable to the holding of that office and therefore no charge to tax will arise in respect of it.

The advice concludes:

[“15]. …, the legal difficulties that may previously have existed in relation to appointing incumbents on a non-stipendiary basis have been removed and there is no longer any doubt as to the lawfulness of making such appointments.

Or “without any doubt of any kind whatever” as W S Gilbert’s Grand Inquisitor would have said.

Cite this article as: David Pocklington, "Avoidance of simony and income tax" in Law & Religion UK, 4 February 2019, https://lawandreligionuk.com/2019/02/04/avoidance-of-simony-and-income-tax/

9 thoughts on “Avoidance of simony and income tax

    • Thanks Michael. The thought crossed my mind when I was writing the piece; I assumed that this would be covered by paragraph 13, “accepting appointment as an incumbent where the office holder is not entitled to a stipend, does not amount to the priest concerned agreeing to give up any emoluments of the benefice and the question of simony does not arise”. David

    • Clergy are regarded as “office holders” rather than “employees”, and the national minimum wage legislation would therefore not be applicable.

      • That seems rather an anachronistic distinction in this day & age. All the noise (& legal cases) around employment rights for those working in the ‘gig economy’ indicates how views are shifting in this area of law.

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