Charities Bill [HL]

Session 2010 - 12
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Other Bills before Parliament

Charities Bill [HL]

Charities Bill [HL]
Part 6 — Cy-près powers and assistance and supervision of charities by court and Commission
52

(3)
The court or the Commission may make a common deposit scheme on the
application of any two or more charities.
101
Bodies which may participate in common deposit schemes
(1)
A common deposit scheme—
(a)
may be made in terms admitting any charity to participate, or
5
(b)
may restrict the right to participate in any manner.
(2)
A common deposit scheme may provide for appropriate bodies to be admitted
to participate in the scheme (in addition to the participating charities) to such
extent as the trustees appointed to manage the fund may determine.
(3)
In this section “appropriate body” means—
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(a)
a Scottish recognised body, or
(b)
a Northern Ireland charity,

and, in the application of the relevant provisions in relation to a scheme which
contains provisions authorised by subsection (2), “charity” includes an
appropriate body.
15
(4)
The relevant provisions are—
(a)
section 100(1) (power to make common deposit schemes),
(b)
section 102 (provisions which may be included in common deposit
schemes),
(c)
section 103(1) (provisions relating to rights of participating charity etc.),
20
and
(d)
(in relation only to a Northern Ireland charity) section 103(2) (power to
participate in common deposit schemes).
102
Provisions which may be included in common deposit schemes
A common deposit scheme may make provision for, and for all matters
25
connected with, the establishment, investment, management and winding up
of the common deposit fund, and may in particular include provision—
(a)
for remunerating persons appointed trustees to hold or manage the
fund or any part of it, with or without provision authorising a person
to receive the remuneration even though the person is also a charity
30
trustee of or trustee for a participating charity;
(b)
for regulating as to time, amount or otherwise the right to repayment
of sums deposited in the fund;
(c)
for authorising a part of the income for any year to be credited to a
reserve account maintained for the purpose of counteracting any losses
35
accruing to the fund, and generally for regulating the manner in which
the rate of interest on deposits is to be determined from time to time;
(d)
for enabling money to be borrowed temporarily for the purpose of
meeting payments to be made out of the funds;
(e)
for enabling questions arising under the scheme as to the right of a
40
charity to participate, or as to the rights of participating charities, or as
to any other matter, to be conclusively determined by the decision of
the trustees managing the fund or in any other manner;
(f)
for regulating the accounts and information to be supplied to
participating charities.
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Charities Bill [HL]
Part 6 — Cy-près powers and assistance and supervision of charities by court and Commission
53

103
Further provisions relating to common deposit schemes and funds
(1)
Except in so far as a common deposit scheme provides to the contrary—
(a)
the rights under it of a participating charity are not capable of being
assigned or charged;
(b)
a trustee or other person concerned in the management of the common
5
deposit fund is not required or entitled to take account of any trust or
other equity affecting a participating charity or its property or rights.
(2)
The powers of investment of every charity include power to participate in
common deposit schemes unless the power is excluded by a provision
specifically referring to common deposit schemes in the trusts of the charity.
10
(3)
A common deposit fund is to be treated for all purposes as being a charity.
(4)
Subsection (3) applies not only to common deposit funds established under
section 100, but also to any similar fund established for the exclusive benefit of
charities by or under any enactment relating to any particular charities or class
of charities.
15
104
Meaning of “Scottish recognised body” and “Northern Ireland charity”
(1)
In sections 97 and 101 “Scottish recognised body” means a body–
(a)
established under the law of Scotland, or
(b)
managed or controlled wholly or mainly in or from Scotland,

to which HMRC have given intimation, which has not subsequently been
20
withdrawn, that tax relief is due in respect of income of the body which is
applicable and applied to charitable purposes only.
(2)
In sections 97 and 101 “Northern Ireland charity” means an institution—
(a)
which is a charity under the law of Northern Ireland, and
(b)
to which HMRC have given intimation, which has not subsequently
25
been withdrawn, that tax relief is due in respect of income of the
institution which is applicable and applied to charitable purposes only.
(3)
For the purposes of this section—
“HMRC” means the Commissioners for Her Majesty’s Revenue and
Customs;
30
“tax relief” means relief under—
(a)
Part 10 of the Income Tax Act 2007, or
(b)
any provision of Part 11 of the Corporation Tax Act 2010 other
than sections 480 (exemption for profits of small-scale trades)
and 481 (exemption from charges under provisions to which
35
section 1173 applies).
Power to authorise dealings with charity property, ex gratia payments etc.
105
Power to authorise dealings with charity property etc.
(1)
Subject to the provisions of this section, where it appears to the Commission
that any action proposed or contemplated in the administration of a charity is
40
expedient in the interests of the charity, the Commission may by order sanction
that action, whether or not it would otherwise be within the powers exercisable
by the charity trustees in the administration of the charity.

Charities Bill [HL]
Part 6 — Cy-près powers and assistance and supervision of charities by court and Commission
54

(2)
Anything done under the authority of an order under this section is to be
treated as properly done in the exercise of those powers.
(3)
An order under this section—
(a)
may be made so as to authorise a particular transaction, compromise or
the like, or a particular application of property, or so as to give a more
5
general authority, and
(b)
may authorise a charity to use common premises, or employ a common
staff, or otherwise combine for any purpose of administration, with any
other charity.

Paragraph (b) does not affect the generality of subsection (1).
10
(4)
An order under this section may give directions—
(a)
as to the manner in which any expenditure is to be borne, and
(b)
as to other matters connected with or arising out of the action
authorised by the order.
(5)
Where anything is done in pursuance of an authority given by an order under
15
this section, any directions given in connection with that authority—
(a)
are binding on the charity trustees for the time being as if contained in
the trusts of the charity, but
(b)
may on the application of the charity be modified or superseded by a
further order.
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(6)
The directions which may be given by an order under this section in particular
include directions—
(a)
for meeting any expenditure out of a specified fund,
(b)
for charging any expenditure to capital or to income,
(c)
for requiring expenditure charged to capital to be recouped out of
25
income within a specified period,
(d)
for restricting the costs to be incurred at the expense of the charity, or
(e)
for the investment of money arising from any transaction.

This does not affect the generality of subsection (4).
(7)
An order under this section may authorise any act even though—
30
(a)
it is prohibited by the Ecclesiastical Leases Act 1836, or
(b)
the trusts of the charity provide for the act to be done by or under the
authority of the court.
(8)
But an order under this section may not—
(a)
authorise the doing of any act expressly prohibited by any Act other
35
than the Ecclesiastical Leases Act 1836, or by the trusts of the charity, or
(b)
extend or alter the purposes of the charity.
(9)
In the case of a charitable company, an order under this section may authorise
an act even though it involves the breach of a duty imposed on a director of the
company under Chapter 2 of Part 10 of the Companies Act 2006 (general duties
40
of directors).
(10)
An order under this section does not confer any authority in relation to a
building which has been consecrated and of which the use or disposal is
regulated, and can be further regulated, by a scheme having effect or treated as
having effect under or by virtue of the Mission and Pastoral Measure 2011.
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(11)
The reference in subsection (10) to a building is to be treated as including—

Charities Bill [HL]
Part 6 — Cy-près powers and assistance and supervision of charities by court and Commission
55

(a)
part of a building, and
(b)
any land which under such a scheme is to be used or disposed of with
a building to which the scheme applies.
106
Power to authorise ex gratia payments etc.
(1)
Subject to subsection (5), the Commission may by order exercise the same
5
power as is exercisable by the Attorney General to authorise the charity
trustees of a charity to take any action falling within subsection (2)(a) or (b) in
a case where the charity trustees—
(a)
(apart from this section) have no power to take the action, but
(b)
in all the circumstances regard themselves as being under a moral
10
obligation to take it.
(2)
The actions are—
(a)
making any application of property of the charity, or
(b)
waiving to any extent, on behalf of the charity, its entitlement to receive
any property.
15
(3)
The power conferred on the Commission by subsection (1) is exercisable by the
Commission under the supervision of, and in accordance with such directions
as may be given by, the Attorney General.
(4)
Any such directions may in particular require the Commission, in such
circumstances as are specified in the directions—
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(a)
to refrain from exercising the power conferred by subsection (1), or
(b)
to consult the Attorney General before exercising it.
(5)
Where—
(a)
an application is made to the Commission for it to exercise the power
conferred by subsection (1) in a case where it is not precluded from
25
doing so by any such directions, but
(b)
the Commission considers that it would nevertheless be desirable for
the application to be entertained by the Attorney General rather than by
the Commission,

the Commission must refer the application to the Attorney General.
30
(6)
It is hereby declared that where—
(a)
an application is made to the Commission as mentioned in subsection
(5)(a), and
(b)
the Commission determines the application by refusing to authorise
charity trustees to take any action falling within subsection (2)(a) or (b),
35

that refusal does not preclude the Attorney General, on an application
subsequently made to the Attorney General by the charity trustees, from
authorising them to take that action.
Power to give directions about dormant bank accounts of charities
107
Power to direct transfer of credits in dormant bank accounts
40
(1)
The Commission may give a direction under subsection (2) where—
(a)
it is informed by a relevant institution—

Charities Bill [HL]
Part 6 — Cy-près powers and assistance and supervision of charities by court and Commission
56

(i)
that it holds one or more accounts in the name of or on behalf of
a particular charity (“the relevant charity”), and
(ii)
that the account, or (if it so holds two or more accounts) each of
the accounts, is dormant, and
(b)
it is unable, after making reasonable inquiries, to locate that charity or
5
any of its trustees.
(2)
A direction under this subsection is a direction which—
(a)
requires the institution concerned to transfer the amount, or (as the case
may be) the aggregate amount, standing to the credit of the relevant
charity in the account or accounts in question to such other charity as is
10
specified in the direction in accordance with subsection (3), or
(b)
requires the institution concerned to transfer to each of two or more
other charities so specified in the direction such part of that amount or
aggregate amount as is there specified in relation to that charity.
(3)
The Commission—
15
(a)
may specify in a direction under subsection (2) such other charity or
charities as it considers appropriate, having regard, in a case where the
purposes of the relevant charity are known to the Commission, to those
purposes and to the purposes of the other charity or charities, but
(b)
must not so specify any charity unless it has received from the charity
20
trustees written confirmation that those trustees are willing to accept
the amount proposed to be transferred to the charity.
(4)
Any amount received by a charity by virtue of this section is to be received by
the charity on terms that—
(a)
it is to be held and applied by the charity for the purposes of the charity,
25
but
(b)
as property of the charity, it is nevertheless subject to any restrictions
on expenditure to which it was subject as property of the relevant
charity.
(5)
The receipt of any charity trustees or trustee for a charity in respect of any
30
amount received from a relevant institution by virtue of this section is a
complete discharge of the institution in respect of that amount.
108
Accounts which cease to be dormant before transfer
(1)
This section applies where—
(a)
the Commission has been informed as mentioned in section 107(1)(a)
35
by any relevant institution, and
(b)
before any transfer is made by the institution in pursuance of a
direction under section 107(2), the institution has, by reason of any
circumstances, cause to believe that the account, or (as the case may be)
any of the accounts, held by it in the name of or on behalf of the relevant
40
charity is no longer dormant.
(2)
The institution must without delay notify those circumstances in writing to the
Commission.
(3)
If it appears to the Commission that the account or accounts in question is or
are no longer dormant, it must revoke any direction under section 107(2) which
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has previously been given by it to the institution with respect to the relevant
charity.