Session 2010 - 12
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Charities Bill [HL]


Charities Bill [HL]
Part 13 — Unincorporated charities

137

 

(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)   

The trusts are to be taken to have been so modified as from—

5

(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).

Powers of unincorporated charities to spend capital

10

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

larger fund given for particular purpose) apply to it.

15

(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)   

The condition is that the charity trustees are satisfied that the purposes set out

20

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

fund or portion may by virtue of this section be expended in carrying out the

25

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)   

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

30

(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     

Resolution to spend larger fund given for particular purpose

35

(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)   

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

40

(iii)   

by two or more individuals or institutions in pursuit of a

common purpose, and

 
 

Charities Bill [HL]
Part 13 — Unincorporated charities

138

 

(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

of it, ought to be freed from the restrictions with respect to expenditure of

5

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

expended as well as income accruing to it, rather than just such income.

10

(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)   

may not implement the resolution except in accordance with sections

15

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)   

the market value of the fund as recorded in the accounts for the

20

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)   

In subsection (1), the reference to the giving of property by an individual

25

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)   

direct the charity trustees to give public notice of the resolution in such

30

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

35

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

under section 282, or

40

(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),

the Commission must take into account—

45

 
 

Charities Bill [HL]
Part 13 — Unincorporated charities

139

 

(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,

the needs of its beneficiaries, and the social, economic and legal

5

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

with the restrictions mentioned in section 282(2)), and

10

(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)   

that the Commission concurs with the resolution, or

15

(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,

and

20

(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

the resolution, or

25

(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

the purposes set out in the trusts to which the fund is subject without regard to

30

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)   

by substituting a different sum for the sum for the time being specified

35

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—

section 267(1) (income level for purposes of resolution to transfer property

40

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

resolution to spend larger fund given for particular purpose).

45

 
 

Charities Bill [HL]
Part 14 — Special trusts

140

 

286     

Effect of provisions relating to vesting or transfer of property

No vesting or transfer of any property in pursuance of any provision of this

Part operates as a breach of a covenant or condition against alienation or gives

rise to a forfeiture.

Part 14

5

Special trusts

287     

Meaning of “special trust”

(1)   

In this Act, “special trust” means property which—

(a)   

is held and administered by or on behalf of a charity for any special

purposes of the charity, and

10

(b)   

is so held and administered on separate trusts relating only to that

property.

(2)   

But a special trust does not, by itself, constitute a charity for the purposes of

Part 8 (charity accounts, reports and returns).

288     

Power to spend capital subject to special trusts: general

15

(1)   

This section applies to any available endowment fund of a special trust which,

as the result of a direction under section 12(1), is to be treated as a separate

charity (“the relevant charity”) for the purposes of this section and sections 289

to 292.

(2)   

But this section does not apply to such a fund if sections 289 to 291 (power to

20

spend capital subject to special trusts: larger fund) apply in relation to it.

(3)   

If the condition in subsection (4) is met in relation to the relevant 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.

25

(4)   

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

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

30

fund 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.

35

(7)   

In this section, “available endowment fund” has the same meaning as in section

281 (power of unincorporated charities to spend capital: general).

289     

Resolution to spend capital subject to special trusts: larger fund

(1)   

This section applies to a fund within section 288(1) if—

(a)   

the capital of the fund consists entirely of property given—

40

(i)   

by a particular individual,

 
 

Charities Bill [HL]
Part 14 — Special trusts

141

 

(ii)   

by 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

(b)   

the market value of the fund exceeds £10,000.

(2)   

If the condition in subsection (3) is met in relation to the relevant charity, the

5

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.

(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

10

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.

(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,

15

and

(b)   

may not implement the resolution except in accordance with sections

290 and 291.

(5)   

In this section, “market value” has the same meaning as in section 282

(resolution to spend larger fund for given for particular purpose).

20

(6)   

In subsection (1), the reference to the giving of property by an individual

includes the individual’s giving it by will.

290     

Notice of, and information about, s.289 resolution

(1)   

Having received the copy of the resolution under section 289(4), the

Commission may—

25

(a)   

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)   

by persons appearing to it to be interested in the relevant

30

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—

35

(a)   

the circumstances in and by reference to which they have decided to act

under section 289, or

(b)   

their compliance with any obligation imposed on them by or under

section 289 or this section in connection with the resolution.

291     

When and how s.289 resolution takes effect

40

(1)   

When considering whether to concur with the resolution under section 289(2),

the Commission must take into account—

(a)   

any evidence available to it as to the wishes of the donor or donors

mentioned in section 289(1)(a), and

 
 

Charities Bill [HL]
Part 15 — Local charities

142

 

(b)   

any changes in the circumstances relating to the relevant charity since

the making of the gift or gifts (including, in particular, its financial

position, the 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—

5

(a)   

that its implementation would accord with the spirit of the gift or gifts

mentioned in section 289(1)(a) (even though it would be inconsistent

with the restrictions mentioned in section 289(2)), and

(b)   

that the charity trustees have complied with the obligations imposed on

them by or under section 289 or 290 in connection with the resolution.

10

(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)   

that the Commission concurs with the resolution, or

(b)   

that it does not concur with it.

(4)   

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

15

(a)   

if the Commission directs the charity trustees under section 290(1) to

give public notice of the resolution, the date when that notice is given,

and

(b)   

otherwise, the date on which the Commission receives the copy of the

resolution in accordance with section 289(4).

20

(5)   

Where—

(a)   

the charity trustees are notified by the Commission that it concurs with

the 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

25

resolution,

   

the fund 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 section 289(2).

(6)   

The fund or portion may be so expended as from such date as is specified for

30

this purpose in the resolution.

292     

Power to alter sum specified in s.289

The Minister may by order amend section 289(1) (market value of fund for

purposes of resolution to spend capital subject to special trusts: larger fund) by

substituting a different sum for the sum for the time being specified there.

35

Part 15

Local charities

Indexes and reviews etc.

293     

Meaning of “local charity”

In this Act, except in so far as the context otherwise requires, “local charity”

40

means, in relation to any area, a charity established for purposes which are—

(a)   

by their nature, or

 
 

Charities Bill [HL]
Part 15 — Local charities

143

 

(b)   

by the trusts of the charity,

directed wholly or mainly to the benefit of that area or of part of it.

294     

Local authority’s index of local charities

(1)   

A council may maintain an index of local charities or of any class of local

charities in the council’s area, and may publish information contained in the

5

index, or summaries or extracts taken from it.

(2)   

A council proposing to establish or maintaining under this section an index of

local charities or of any class of local charities must, on request, be supplied by

the Commission free of charge—

(a)   

with copies of such entries in the register of charities as are relevant to

10

the index, or

(b)   

with particulars of any changes in the entries of which copies have been

supplied before;

   

and the Commission may arrange that it will without further request supply a

council with particulars of any such changes.

15

(3)   

An index maintained under this section must be open to public inspection at

all reasonable times.

295     

Reviews of local charities by local authority

(1)   

A council may—

(a)   

subject to the following provisions of this section, initiate, and carry out

20

in co-operation with the charity trustees, a review of the working of any

group of local charities with the same or similar purposes in the

council’s area, and

(b)   

make to the Commission such report on the review and such

recommendations arising from it as the council, after consultation with

25

the trustees, think fit.

(2)   

A council having power to initiate reviews under this section may—

(a)   

co-operate with other persons in any review by them of the working of

local charities in the council’s area (with or without other charities), or

(b)   

join with other persons in initiating and carrying out such a review.

30

(3)   

No review initiated by a council under this section is to extend—

(a)   

to any charity without the consent of the charity trustees, or

(b)   

to any ecclesiastical charity.

(4)   

No review initiated under this section by a district council is to extend to the

working in any county of a local charity established for purposes similar or

35

complementary to any services provided by county councils unless the review

so extends with the consent of the council of that county.

(5)   

Subsection (4) does not apply in relation to Wales.

296     

S.294 and s.295: supplementary

(1)   

In sections 294 and 295 and this section “council” means—

40

(a)   

a district council,

(b)   

a county council,

 
 

 
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Revised 28 June 2011