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Charities Bill (HC Bill 257)

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Supplementary

264 Records of applications and certificates

(1) The Commission must keep a record of all applications for, and certificates of,
incorporation under this Part.

(2) 5Documents sent to the Commission under this Part are to be kept by the
Commission for such period as it thinks fit.

(3) Documents kept under this section are to be open to public inspection at all
reasonable times.

(4) Any person who is provided with a copy or extract of any document kept
10under this section may require it to be certified by a certificate signed by a
member of the staff of the Commission.

265 Meaning of “incorporated body” and “relevant charity”

In this Part—

  • “incorporated body” means a body incorporated under section 251;

  • 15“the relevant charity”, in relation to an incorporated body, means the
    charity the charity trustees of which have been incorporated as that
    body.

266 Effect of provisions relating to vesting or transfer of property

No vesting or transfer of any property in pursuance of any provision of this
20Part operates as a breach of a covenant or condition against alienation or gives
rise to a forfeiture.

Part 13 Unincorporated charities

Power to transfer all property of unincorporated charity

267 25Introduction

(1) Section 268 (resolution to transfer all property) applies to a charity if—

(a) (subject to subsection (2)) its gross income in its last financial year did
not exceed £10,000,

(b) it does not hold any designated land, and

(c) 30it is not a company or other body corporate.

“Designated land” means land held on trusts which stipulate that it is to be
used for the purposes, or any particular purposes, of the charity.

(2) Subsection (1)(a) does not apply in relation to a resolution by the charity
trustees of a charity—

(a) 35to transfer all its property to a CIO, or

(b) to divide its property between two or more CIOs.

(3) Where a charity has a permanent endowment, sections 268 to 272 have effect in
accordance with sections 273 and 274.

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(4) In sections 268 to 274 references to the transfer of property to a charity are
references to its transfer—

(a) to the charity,

(b) to the charity trustees,

(c) 5to any trustee for the charity, or

(d) to a person nominated by the charity trustees to hold it in trust for the
charity,

as the charity trustees may determine.

268 Resolution to transfer all property

(1) 10The charity trustees of a charity to which this section applies (see section 267)
may resolve for the purposes of this section—

(a) that all the property of the charity should be transferred to another
charity specified in the resolution, or

(b) that all the property of the charity should be transferred to two or more
15charities specified in the resolution in accordance with such division of
the property between them as is so specified.

(2) Any charity so specified may be either a registered charity or a charity which
is not required to be registered.

(3) But the charity trustees of a charity (“the transferor charity”) do not have power
20to pass a resolution under subsection (1) unless they are satisfied—

(a) that it is expedient in the interests of furthering the purposes for which
the property is held by the transferor charity for the property to be
transferred in accordance with the resolution, and

(b) that the purposes (or any of the purposes) of any charity to which
25property is to be transferred under the resolution are substantially
similar to the purposes (or any of the purposes) of the transferor
charity.

(4) Any resolution under subsection (1) must be passed by a majority of not less
than two-thirds of the charity trustees who vote on the resolution.

(5) 30Where charity trustees have passed a resolution under subsection (1), they
must send a copy of it to the Commission, together with a statement of their
reasons for passing it.

269 Notice of, and information about, resolution to transfer property

(1) Having received the copy of the resolution under section 268(5), the
35Commission—

(a) may direct the charity trustees to give public notice of the resolution in
such manner as is specified in the direction, and

(b) if it gives such a direction, must take into account any representations
made to it—

(i) 40by persons appearing to it to be interested in the charity, and

(ii) within the period of 28 days beginning with the date when
public notice of the resolution is given by the charity trustees.

(2) The Commission may also direct the charity trustees to provide the
Commission with additional information or explanations relating to—

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(a) the circumstances in and by reference to which they have decided to act
under section 268, or

(b) their compliance with any obligation imposed on them by or under
section 268 or this section in connection with the resolution.

270 5General rule as to when s.268 resolution takes effect

Subject to section 271, a resolution under section 268(1) takes effect at the end
of the period of 60 days beginning with the date on which the copy of it was
received by the Commission.

271 S.268 resolution not to take effect or to take effect at later date

(1) 10A resolution does not take effect under section 270 if before the end of—

(a) the 60-day period, or

(b) that period as modified by subsection (4) or (5),

the Commission notifies the charity trustees in writing that it objects to the
resolution, either on procedural grounds or on the merits of the proposals
15contained in the resolution.

(2) “The 60-day period” means the period of 60 days mentioned in section 270.

(3) “On procedural grounds” means on the grounds that any obligation imposed
on the charity trustees by or under section 268 or 269 has not been complied
with in connection with the resolution.

(4) 20If under section 269(1) the Commission directs the charity trustees to give
public notice of a resolution, the running of the 60-day period is suspended by
virtue of this subsection—

(a) as from the date on which the direction is given to the charity trustees,
and

(b) 25until the end of the period of 42 days beginning with the date on which
public notice of the resolution is given by the charity trustees.

(5) If under section 269(2) the Commission directs the charity trustees to provide
any information or explanations, the running of the 60-day period is
suspended by virtue of this subsection—

(a) 30as from the date on which the direction is given to the charity trustees,
and

(b) until the date on which the information or explanations is or are
provided to the Commission.

(6) Subsection (7) applies once the period of time, or the total period of time,
35during which the 60-day period is suspended by virtue of either or both of
subsections (4) and (5) exceeds 120 days.

(7) At that point the resolution (if not previously objected to by the Commission)
is to be treated as if it had never been passed.

272 Transfer of property in accordance with s.268 resolution

(1) 40Subsection (2) applies where a resolution under section 268(1) has taken effect.

(2) The charity trustees must arrange for all the property of the transferor charity
to be transferred in accordance with the resolution, and on terms that any
property so transferred—

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(a) is to be held by the charity to which it is transferred (“the transferee
charity”) in accordance with subsection (3), but

(b) when so held is nevertheless to be subject to any restrictions on
expenditure to which it was subject as property of the transferor
5charity;

and the charity trustees must arrange for the property to be so transferred by
such date after the resolution takes effect as they agree with the charity trustees
of the transferee charity or charities concerned.

(3) The charity trustees of any charity to which property is transferred under this
10section must secure, so far as is reasonably practicable, that the property is
applied for such of its purposes as are substantially similar to those of the
transferor charity.

But this requirement does not apply if those charity trustees consider that
complying with it would not result in a suitable and effective method of
15applying the property.

(4) For the purpose of enabling any property to be transferred to a charity under
this section, the Commission may, at the request of the charity trustees of that
charity, make orders vesting any property of the transferor charity—

(a) in the transferee charity, in its charity trustees or in any trustee for that
20charity, or

(b) in any other person nominated by those charity trustees to hold
property in trust for that charity.

273 Transfer where charity has permanent endowment: general

(1) This section and section 274 provide for the operation of sections 268 to 272
25where a charity within section 267(1) has a permanent endowment (whether or
not the charity’s trusts contain provision for the termination of the charity).

(2) If the charity has both a permanent endowment and other property
(“unrestricted property”)—

(a) a resolution under section 268(1) must relate to both its permanent
30endowment and its unrestricted property, and

(b) sections 268 to 272 apply—

(i) in relation to its unrestricted property, as if references in those
sections to all or any of the property of the charity were
references to all or any of its unrestricted property, and

(ii) 35in relation to its permanent endowment, in accordance with
section 274.

(3) If all of the property of the charity is comprised in its permanent endowment,
sections 268 to 272 apply in relation to its permanent endowment in accordance
with section 274.

274 40Requirements relating to permanent endowment

(1) Sections 268 to 272 apply in relation to the permanent endowment of the
charity (as mentioned in section 273(2)(b)(ii) and (3)) with the following
modifications.

(2) References in sections 268 to 272 to all or any of the property of the charity are
45references to all or any of the property comprised in its permanent
endowment.

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(3) If the property comprised in its permanent endowment is to be transferred to
a single charity, the charity trustees must (instead of being satisfied as
mentioned in section 268(3)(b)) be satisfied that the proposed transferee charity
has purposes which are substantially similar to all of the purposes of the
5transferor charity.

(4) If the property comprised in its permanent endowment is to be transferred to
two or more charities, the charity trustees must (instead of being satisfied as
mentioned in section 268(3)(b)) be satisfied—

(a) that the proposed transferee charities, taken together, have purposes
10which are substantially similar to all of the purposes of the transferor
charity, and

(b) that each of the proposed transferee charities has purposes which are
substantially similar to one or more of the purposes of the transferor
charity.

(5) 15In the case of a transfer to which subsection (4) applies, the resolution under
section 268(1) must provide for the property comprised in the permanent
endowment of the charity to be divided between the transferee charities in
such a way as to take account of such guidance as may be given by the
Commission for the purposes of this section.

(6) 20For the purposes of sections 268 to 272, the references in sections 269(2)(b) and
271(3) to any obligation imposed on the charity trustees by or under section 268
or 269 includes a reference to any obligation imposed on them by virtue of any
of subsections (3) to (5).

(7) The requirement in section 272(3) applies in the case of every such transfer, and
25in complying with that requirement the charity trustees of a transferee charity
must secure that the application of property transferred to the charity takes
account of such guidance as may be given by the Commission for the purposes
of this section.

(8) Any guidance given by the Commission for the purposes of this section may
30take such form and be given in such manner as the Commission considers
appropriate.

Powers to alter purposes or powers etc. of unincorporated charity

275 Resolution to replace purposes of unincorporated charity

(1) This section applies to a charity if—

(a) 35its gross income in its last financial year did not exceed £10,000,

(b) it does not hold any designated land, and

(c) it is not a company or other body corporate.

“Designated land” means land held on trusts which stipulate that it is to be
used for the purposes, or any particular purposes, of the charity.

(2) 40The charity trustees of such a charity may resolve for the purposes of this
section that the trusts of the charity should be modified by replacing all or any
of the purposes of the charity with other purposes specified in the resolution.

(3) The other purposes so specified must be charitable purposes.

(4) But the charity trustees of a charity do not have power to pass a resolution
45under subsection (2) unless they are satisfied—

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(a) that it is expedient in the interests of the charity for the purposes in
question to be replaced, and

(b) that, so far as is reasonably practicable, the new purposes consist of or
include purposes that are similar in character to those that are to be
5replaced.

(5) Any resolution under subsection (2) must be passed by a majority of not less
than two-thirds of the charity trustees who vote on the resolution.

(6) Where charity trustees have passed a resolution under subsection (2), they
must send a copy of it to the Commission, together with a statement of their
10reasons for passing it.

276 Notice of, and information about, s.275 resolution

(1) Having received the copy of the resolution under section 275(6), the
Commission—

(a) may direct the charity trustees to give public notice of the resolution in
15such manner as is specified in the direction, and

(b) if it gives such a direction, must take into account any representations
made to it—

(i) by persons appearing to it to be interested in the charity, and

(ii) within the period of 28 days beginning with the date when
20public notice of the resolution is given by the charity trustees.

(2) The Commission may also direct the charity trustees to provide the
Commission with additional information or explanations relating to—

(a) the circumstances in and by reference to which they have decided to act
under section 275, or

(b) 25their compliance with any obligation imposed on them by or under
section 275 or this section in connection with the resolution.

277 General rule as to when s.275 resolution takes effect

Subject to section 278, a resolution under section 275(2) takes effect at the end
of the period of 60 days beginning with the date on which the copy of it was
30received by the Commission.

278 S.275 resolution not to take effect or to take effect at a later date

(1) A resolution does not take effect under section 277 if before the end of—

(a) the 60-day period, or

(b) that period as modified by subsection (4) or (5),

35the Commission notifies the charity trustees in writing that it objects to the
resolution, either on procedural grounds or on the merits of the proposals
contained in the resolution.

(2) “The 60-day period” means the period of 60 days mentioned in section 277.

(3) “On procedural grounds” means on the grounds that any obligation imposed
40on the charity trustees by or under section 275 or 276 has not been complied
with in connection with the resolution.

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(4) If under section 276(1) the Commission directs the charity trustees to give
public notice of a resolution, the running of the 60-day period is suspended by
virtue of this subsection—

(a) as from the date on which the direction is given to the charity trustees,
5and

(b) until the end of the period of 42 days beginning with the date on which
public notice of the resolution is given by the charity trustees.

(5) If under section 276(2) the Commission directs the charity trustees to provide
any information or explanations, the running of the 60-day period is
10suspended by virtue of this subsection—

(a) as from the date on which the direction is given to the charity trustees,
and

(b) until the date on which the information or explanations is or are
provided to the Commission.

(6) 15Subsection (7) applies once the period of time, or the total period of time,
during which the 60-day period is suspended by virtue of either or both of
subsections (4) and (5) exceeds 120 days.

(7) At that point the resolution (if not previously objected to by the Commission)
is to be treated as if it had never been passed.

279 20Replacement of purposes in accordance with s.275

As from the time when a resolution takes effect under section 277, the trusts of
the charity concerned are to be taken to have been modified in accordance with
the terms of the resolution.

280 Power to modify powers or procedures of unincorporated charity

(1) 25This section applies to any charity which is not a company or other body
corporate.

(2) The charity trustees of such a charity may resolve for the purposes of this
section that any provision of the trusts of the charity—

(a) relating to any of the powers exercisable by the charity trustees in the
30administration of the charity, or

(b) regulating the procedure to be followed in any respect in connection
with its administration,

should be modified in such manner as is specified in the resolution.

(3) Subsection (4) applies if the charity is an unincorporated association with a
35body of members distinct from the charity trustees.

(4) Any resolution of the charity trustees under subsection (2) must be approved
by a further resolution which is passed at a general meeting of the body—

(a) by a majority of not less than two-thirds of the members entitled to
attend and vote at the meeting who vote on the resolution, or

(b) 40by a decision taken without a vote and without any expression of
dissent in response to the question put to the meeting.

(5) Where—

(a) the charity trustees have passed a resolution under subsection (2), and

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(b) (if subsection (4) applies) a further resolution has been passed under
that subsection,

the trusts of the charity are to be taken to have been modified in accordance
with the terms of the resolution.

(6) 5The trusts are to be taken to have been so modified as from—

(a) such date as is specified for this purpose in the resolution under
subsection (2), or

(b) (if later) the date when any such further resolution was passed under
subsection (4).

10Powers of unincorporated charities to spend capital

281 Power of unincorporated charities to spend capital: general

(1) This section applies to any available endowment fund of a charity which is not
a company or other body corporate.

(2) But this section does not apply to a fund if sections 282 to 284 (power to spend
15larger fund given for particular purpose) apply to it.

(3) If the condition in subsection (4) is met in relation to the charity, the charity
trustees may resolve for the purposes of this section that the fund, or a portion
of it, ought to be freed from the restrictions with respect to expenditure of
capital that apply to it.

(4) 20The condition is that the charity trustees are satisfied that the purposes set out
in the trusts to which the fund is subject could be carried out more effectively
if the capital of the fund, or the relevant portion of the capital, could be
expended as well as income accruing to it, rather than just such income.

(5) Once the charity trustees have passed a resolution under subsection (3), the
25fund or portion may by virtue of this section be expended in carrying out the
purposes set out in the trusts to which the fund is subject without regard to the
restrictions mentioned in that subsection.

(6) The fund or portion may be so expended as from such date as is specified for
this purpose in the resolution.

(7) 30In this section “available endowment fund”, in relation to a charity, means—

(a) the whole of the charity’s permanent endowment if it is all subject to
the same trusts, or

(b) any part of its permanent endowment which is subject to any particular
trusts that are different from those to which any other part is subject.

282 35Resolution to spend larger fund given for particular purpose

(1) This section applies to any available endowment fund of a charity which is not
a company or other body corporate if—

(a) the capital of the fund consists entirely of property given—

(i) by a particular individual,

(ii) 40by a particular institution (by way of grant or otherwise), or

(iii) by two or more individuals or institutions in pursuit of a
common purpose, and

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(b) the charity’s gross income in its last financial year exceeded £1,000 and
the market value of the endowment fund exceeds £10,000.

(2) If the condition in subsection (3) is met in relation to the charity, the charity
trustees may resolve for the purposes of this section that the fund, or a portion
5of it, ought to be freed from the restrictions with respect to expenditure of
capital that apply to it.

(3) The condition is that the charity trustees are satisfied that the purposes set out
in the trusts to which the fund is subject could be carried out more effectively
if the capital of the fund, or the relevant portion of the capital, could be
10expended as well as income accruing to it, rather than just such income.

(4) The charity trustees—

(a) must send a copy of any resolution under subsection (2) to the
Commission, together with a statement of their reasons for passing it,
and

(b) 15may not implement the resolution except in accordance with sections
283 and 284.

(5) In this section—

  • “available endowment fund” has the same meaning as in section 281;

  • “market value”, in relation to an endowment fund, means—

    (a)

    20the market value of the fund as recorded in the accounts for the
    last financial year of the relevant charity, or

    (b)

    if no such value was so recorded, the current market value of
    the fund as determined on a valuation carried out for the
    purpose.

(6) 25In subsection (1), the reference to the giving of property by an individual
includes the individual’s giving it by will.

283 Notice of, and information about, s.282 resolution

(1) Having received the copy of the resolution under section 282(4), the
Commission may—

(a) 30direct the charity trustees to give public notice of the resolution in such
manner as is specified in the direction, and

(b) if it gives such a direction, must take into account any representations
made to it—

(i) by persons appearing to it to be interested in the charity, and

(ii) 35within the period of 28 days beginning with the date when
public notice of the resolution is given by the charity trustees.

(2) The Commission may also direct the charity trustees to provide the
Commission with additional information or explanations relating to—

(a) the circumstances in and by reference to which they have decided to act
40under section 282, or

(b) their compliance with any obligation imposed on them by or under
section 282 or this section in connection with the resolution.

284 When and how s.282 resolution takes effect

(1) When considering whether to concur with the resolution under section 282(2),
45the Commission must take into account—

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(a) any evidence available to it as to the wishes of the donor or donors
mentioned in section 282(1)(a), and

(b) any changes in the circumstances relating to the charity since the
making of the gift or gifts (including, in particular, its financial position,
5the needs of its beneficiaries, and the social, economic and legal
environment in which it operates).

(2) The Commission must not concur with the resolution unless it is satisfied—

(a) that its implementation would accord with the spirit of the gift or gifts
mentioned in section 282(1)(a) (even though it would be inconsistent
10with the restrictions mentioned in section 282(2)), and

(b) that the charity trustees have complied with the obligations imposed on
them by or under section 282 or 283 in connection with the resolution.

(3) Before the end of the period of 3 months beginning with the relevant date, the
Commission must notify the charity trustees in writing—

(a) 15that the Commission concurs with the resolution, or

(b) that it does not concur with it.

(4) In subsection (3) “the relevant date” means—

(a) if the Commission directs the charity trustees under section 283(1) to
give public notice of the resolution, the date when that notice is given,
20and

(b) otherwise, the date on which the Commission receives the copy of the
resolution in accordance with section 282(4).

(5) Where—

(a) the charity trustees are notified by the Commission that it concurs with
25the resolution, or

(b) the period of 3 months mentioned in subsection (3) has elapsed without
the Commission notifying them that it does not concur with the
resolution,

the fund or portion may, by virtue of this section, be expended in carrying out
30the purposes set out in the trusts to which the fund is subject without regard to
the restrictions mentioned in section 282(2).

Supplementary

285 Power to alter sums specified in this Part

(1) The Minister may by order amend any provision listed in subsection (2)—

(a) 35by substituting a different sum for the sum for the time being specified
in that provision, or

(b) if the provision specifies more than one sum, by substituting a different
sum for any sum specified in that provision.

(2) The provisions are—

  • 40section 267(1) (income level for purposes of resolution to transfer property
    of unincorporated charity);

  • section 275(1) (income level for purposes of resolution to replace purposes
    of unincorporated charity);

  • section 282(1) (income level and market value of fund for purposes of
    45resolution to spend larger fund given for particular purpose).