Session 2010 - 12
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Other Bills before Parliament

Charities Bill [HL]


Charities Bill [HL]
Part 7 — Charity land

68

 

(a)   

(where section 124(1) applies) that the mortgage has been sanctioned by

an order of the court or of the Commission (as the case may be), or

(b)   

(where section 124(2) applies) that the charity trustees have power

under the trusts of the charity to grant the mortgage, and have obtained

and considered such advice as is mentioned in section 124(2).

5

(3)   

Where subsection (2) has been complied with in relation to any mortgage, then

in favour of a person who (whether under the mortgage or afterwards)

acquires an interest in the land in question for money or money’s worth, it is

conclusively presumed that the facts were as stated in the certificate.

(4)   

Subsection (5) applies where—

10

(a)   

section 124(1) or (2) applies to any mortgage of land held by or in trust

for a charity, but

(b)   

subsection (2) has not been complied with in relation to the mortgage.

(5)   

In favour of a person who (whether under the mortgage or afterwards) in good

faith acquires an interest in the land for money or money’s worth, the

15

mortgage is valid whether or not—

(a)   

the mortgage has been sanctioned by an order of the court or of the

Commission, or

(b)   

the charity trustees have power under the trusts of the charity to grant

the mortgage and have obtained and considered such advice as is

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mentioned in section 124(2).

(6)   

Where section 124(7) applies to any mortgage of land held by or in trust for a

charity, the charity trustees must certify in relation to any transaction falling

within section 124(7) that they have obtained and considered such advice as is

mentioned in section 124(7).

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(7)   

Where subsection (6) has been complied with in relation to any transaction,

then, in favour of a person who (whether under the mortgage or afterwards)

has acquired or acquires an interest in the land for money or money’s worth, it

is conclusively presumed that the facts were as stated in the certificate.

126     

Mortgages of charity land and land registration

30

(1)   

Where the mortgage referred to in section 125(1) will be a registrable

disposition, the statement required by section 125(1) must be in such form as

may be prescribed by land registration rules.

(2)   

Where any such mortgage will be one to which section 4(1)(g) of the Land

Registration Act 2002 applies—

35

(a)   

the statement required by section 125(1) must be in such form as may

be prescribed by land registration rules, and

(b)   

if the charity is not an exempt charity, the mortgage must also contain

a statement, in such form as may be prescribed by land registration

rules, that the restrictions on disposition imposed by sections 117 to 121

40

apply to the land (subject to section 117(3)).

(3)   

Where—

(a)   

the registrar approves an application for registration of a person’s title

to land in connection with such a mortgage as is mentioned in

subsection (2),

45

(b)   

the mortgage contains statements complying with section 125(1) and

subsection (2), and

 
 

Charities Bill [HL]
Part 8 — Charity accounts, reports and returns
Chapter 1 — Individual accounts

69

 

(c)   

the charity is not an exempt charity,

   

the registrar must enter in the register a restriction reflecting the limitation

under sections 117 to 121 on subsequent disposal.

(4)   

Subsections (3) and (4) of section 123 (removal of entry) apply in relation to any

restriction entered under subsection (3) as they apply in relation to any

5

restriction entered under section 123(2).

Release of charity rentcharges

127     

Release of charity rentcharges

(1)   

Section 117(1) does not apply to the release by a charity of a rentcharge which

it is entitled to receive if the release is given in consideration of the payment of

10

an amount which is not less than 10 times the annual amount of the rentcharge.

(2)   

Where a charity which is entitled to receive a rentcharge releases it in

consideration of the payment of an amount not exceeding £1,000, any costs

incurred by the charity in connection with proving its title to the rentcharge are

recoverable by the charity from the person or persons in whose favour the

15

rentcharge is being released.

(3)   

Neither section 117(1) nor subsection (2) of this section applies where a

rentcharge which a charity is entitled to receive is redeemed under sections 8

to 10 of the Rentcharges Act 1977.

128     

Power to alter sum specified in s.127(2)

20

The Minister may by order amend section 127(2) by substituting a different

sum for the sum for the time being specified there.

Interpretation

129     

Interpretation

(1)   

In sections 117 to 126 “land” means land in England and Wales.

25

(2)   

In sections 124 to 126 “mortgage” includes a charge.

(3)   

Sections 123 and 126 are to be construed as one with the Land Registration Act

2002.

Part 8

Charity accounts, reports and returns

30

Chapter 1

Individual accounts

130     

Accounting records

(1)   

The charity trustees of a charity must ensure that accounting records are kept

in respect of the charity which are sufficient to show and explain all the

35

charity’s transactions, and which are such as to—

 
 

Charities Bill [HL]
Part 8 — Charity accounts, reports and returns
Chapter 1 — Individual accounts

70

 

(a)   

disclose at any time, with reasonable accuracy, the financial position of

the charity at that time, and

(b)   

enable the trustees to ensure that, where any statements of accounts are

prepared by them under section 132(1), those statements of accounts

comply with the requirements of regulations under section 132(1).

5

(2)   

The accounting records must in particular contain—

(a)   

entries showing from day to day all sums of money received and

expended by the charity, and the matters in respect of which the receipt

and expenditure takes place, and

(b)   

a record of the assets and liabilities of the charity.

10

131     

Preservation of accounting records

(1)   

The charity trustees of a charity must preserve any accounting records made

for the purposes of section 130 in respect of the charity for at least 6 years from

the end of the financial year of the charity in which they are made.

(2)   

Subsection (3) applies if a charity ceases to exist within the period of 6 years

15

mentioned in subsection (1) as it applies to any accounting records.

(3)   

The obligation to preserve the accounting records in accordance with

subsection (1) must continue to be discharged by the last charity trustees of the

charity, unless the Commission consents in writing to the records being

destroyed or otherwise disposed of.

20

132     

Preparation of statement of accounts

(1)   

The charity trustees of a charity must (subject to section 133) prepare in respect

of each financial year of the charity a statement of accounts complying with

such requirements as to its form and contents as may be prescribed by

regulations made by the Minister.

25

(2)   

Regulations under subsection (1) may in particular make provision—

(a)   

for any such statement to be prepared in accordance with such methods

and principles as are specified or referred to in the regulations;

(b)   

as to any information to be provided by way of notes to the accounts.

(3)   

Regulations under subsection (1) may also make provision for determining the

30

financial years of a charity for the purposes of this Act and any regulations

made under it.

(4)   

But regulations under subsection (1) may not impose on the charity trustees of

a charity that is a charitable trust created by any person (“the settlor”) any

requirement to disclose, in any statement of accounts prepared by them under

35

subsection (1)—

(a)   

the identities of recipients of grants made out of the funds of the

charity, or

(b)   

the amounts of any individual grants so made,

   

if the disclosure would fall to be made at a time when the settlor or any spouse

40

or civil partner of the settlor was still alive.

 
 

Charities Bill [HL]
Part 8 — Charity accounts, reports and returns
Chapter 1 — Individual accounts

71

 

133     

Account and statement an option for lower-income charities

If a charity’s gross income in any financial year does not exceed £250,000, the

charity trustees may, in respect of that year, elect to prepare—

(a)   

a receipts and payments account, and

(b)   

a statement of assets and liabilities,

5

instead of a statement of accounts under section 132(1).

134     

Preservation of statement of accounts or account and statement

(1)   

The charity trustees of a charity must preserve—

(a)   

any statement of accounts prepared by them under section 132(1), or

(b)   

any account and statement prepared by them under section 133,

10

   

for at least 6 years from the end of the financial year to which any such

statement relates or (as the case may be) to which any such account and

statement relate.

(2)   

Subsection (3) applies if a charity ceases to exist within the period of 6 years

mentioned in subsection (1) as it applies to any statement of accounts or

15

account and statement.

(3)   

The obligation to preserve the statement or account and statement in

accordance with subsection (1) must continue to be discharged by the last

charity trustees of the charity, unless the Commission consents in writing to the

statement or account and statement being destroyed or otherwise disposed of.

20

135     

Charitable companies

Nothing in sections 130 to 134 (preparation and preservation of individual

accounts) applies to a charitable company.

136     

Exempt charities

(1)   

Nothing in sections 130 to 134 (preparation and preservation of individual

25

accounts) applies to an exempt charity.

(2)   

But the charity trustees of an exempt charity—

(a)   

must keep proper books of account with respect to the affairs of the

charity, and

(b)   

if not required by or under the authority of any other Act to prepare

30

periodical statements of account must prepare consecutive statements

of account consisting on each occasion of—

(i)   

an income and expenditure account relating to a period of not

more than 15 months, and

(ii)   

a balance sheet relating to the end of that period.

35

(3)   

The books of accounts and statements of account relating to an exempt charity

must be preserved for a period of at least 6 years unless—

(a)   

the charity ceases to exist, and

(b)   

the Commission consents in writing to their being destroyed or

otherwise disposed of.

40

 
 

Charities Bill [HL]
Part 8 — Charity accounts, reports and returns
Chapter 2 — Group accounts

72

 

Chapter 2

Group accounts

137     

Accounting records

(1)   

The charity trustees of a parent charity or of any charity which is a subsidiary

undertaking must ensure that the accounting records kept in respect of the

5

charity under—

(a)   

section 130(1) (individual accounts: accounting records), or

(b)   

(as the case may be) section 386 of the Companies Act 2006 (duty to

keep accounting records),

   

are such as to enable the charity trustees of the parent charity to ensure that,

10

where any group accounts are prepared by them under section 138(2), those

accounts comply with the requirements of regulations under section 142.

(2)   

The duty in subsection (1) is in addition to the duty to ensure that the

accounting records comply with the requirements of—

(a)   

section 130(1), or

15

(b)   

section 386 of the Companies Act 2006.

(3)   

Subsection (4) applies if a parent charity has a subsidiary undertaking in

relation to which the requirements of—

(a)   

section 130(1), or

(b)   

section 386 of the Companies Act 2006,

20

   

do not apply.

(4)   

The charity trustees of the parent charity must take reasonable steps to secure

that the undertaking keeps such accounting records as to enable the trustees to

ensure that, where any group accounts are prepared by them under section

138(2), those accounts comply with the requirements of regulations under

25

section 142.

138     

Preparation of group accounts

(1)   

This section applies in relation to a financial year of a charity if—

(a)   

the charity is a parent charity at the end of that year, and

(b)   

(where it is a company) it is not required to prepare consolidated

30

accounts for that year under section 399 of the Companies Act 2006

(duty to prepare group accounts), whether or not such accounts are in

fact prepared.

(2)   

The charity trustees of the parent charity must prepare group accounts in

respect of that year.

35

(3)   

If the requirement in subsection (2) applies to the charity trustees of a parent

charity (other than a parent charity which is a company) in relation to a

financial year—

(a)   

that requirement so applies in addition to the requirement in section

132(1) (statement of accounts), and

40

(b)   

the option of preparing the documents mentioned in section 133

(account and statement) is not available in relation to that year

(whatever the amount of the charity’s gross income for that year).

(4)   

If—

 
 

Charities Bill [HL]
Part 8 — Charity accounts, reports and returns
Chapter 2 — Group accounts

73

 

(a)   

the requirement in subsection (2) applies to the charity trustees of a

parent charity in relation to a financial year, and

(b)   

the charity is a company,

   

that requirement so applies in addition to the requirement in section 394 of the

Companies Act 2006 (duty to prepare individual accounts).

5

(5)   

Subsection (2) is subject to section 139.

139     

Exceptions to requirement to prepare group accounts

(1)   

The requirement in section 138(2) does not apply to the charity trustees of a

parent charity in relation to a financial year if at the end of that year it is itself

a subsidiary undertaking in relation to another charity.

10

(2)   

The requirement in section 138(2) does not apply to the charity trustees of a

parent charity in relation to a financial year if the aggregate gross income of the

group for that year does not exceed such sum as is specified in regulations

made by the Minister.

(3)   

Regulations made by the Minister may prescribe circumstances in which a

15

subsidiary undertaking may or (as the case may be) must be excluded from

group accounts required to be prepared under section 138(2) for a financial

year.

(4)   

Where, by virtue of such regulations, each of the subsidiary undertakings

which are members of a group is—

20

(a)   

permitted to be excluded from any such group accounts for a financial

year, or

(b)   

required to be so excluded,

   

the requirement in section 138(2) does not apply to the charity trustees of the

parent charity in relation to that year.

25

140     

Preservation of group accounts

(1)   

The charity trustees of a charity must preserve any group accounts prepared

by them under section 138(2) for at least 6 years from the end of the financial

year to which the accounts relate.

(2)   

Subsection (3) applies if a charity ceases to exist within the period of 6 years

30

mentioned in subsection (1) as it applies to any group accounts.

(3)   

The obligation to preserve the accounts in accordance with subsection (1) must

continue to be discharged by the last charity trustees of the charity, unless the

Commission consents in writing to the accounts being destroyed or otherwise

disposed of.

35

141     

“Parent charity”, “subsidiary undertaking” and “group”

(1)   

This section applies for the purposes of this Part.

(2)   

A charity is a parent charity if it is (or is to be treated as) a parent undertaking

in relation to one or more other undertakings in accordance with the provisions

of section 1162 of, and Schedule 7 to, the Companies Act 2006.

40

 
 

Charities Bill [HL]
Part 8 — Charity accounts, reports and returns
Chapter 2 — Group accounts

74

 

(3)   

Each undertaking in relation to which a parent charity is (or is to be treated as)

a parent undertaking in accordance with those provisions is a subsidiary

undertaking in relation to the parent charity.

(4)   

But subsection (3) does not have the result that any of the following is a

subsidiary undertaking—

5

(a)   

any special trusts of a charity,

(b)   

any institution which, by virtue of a direction under section 12(1), is to

be treated as forming part of a charity for the purposes of this Part, or

(c)   

any charity to which a direction under section 12(2) applies for the

purposes of this Part.

10

(5)   

“The group”, in relation to a parent charity, means that charity and its

subsidiary undertaking or undertakings, and any reference to the members of

the group is to be read accordingly.

(6)   

For the purposes of this section and the operation for those purposes of section

1162 of, and Schedule 7 to, the Companies Act 2006 “undertaking” means—

15

(a)   

an undertaking as defined by section 1161(1) of the 2006 Act, or

(b)   

a charity which is not an undertaking as so defined.

142     

“Group accounts”

(1)   

For the purposes of this Part, “group accounts” means consolidated accounts—

(a)   

relating to the group, and

20

(b)   

complying with such requirements as to their form and contents as may

be prescribed by regulations made by the Minister.

(2)   

Regulations under subsection (1) may in particular make provision—

(a)   

for any such accounts to be prepared in accordance with such methods

and principles as are specified or referred to in the regulations;

25

(b)   

for dealing with cases where the financial years of the members of the

group do not all coincide;

(c)   

as to any information to be provided by way of notes to the accounts.

(3)   

Regulations under subsection (1) may also make provision—

(a)   

for determining the financial years of subsidiary undertakings for the

30

purposes of this Part;

(b)   

for imposing on the charity trustees of a parent charity requirements

with respect to securing that such financial years coincide with that of

the charity.

143     

Exempt charities

35

Nothing in sections 137 to 142 (preparation and preservation of group

accounts) applies to an exempt charity.

 
 

 
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