House of Commons portcullis
House of Commons
Session 2005 - 06
Internet Publications
Other Bills before Parliament

Charities Bill [HL]


Charities Bill [HL]
Part 2 — Regulation of charities
Chapter 3 — Registration of charities

15

 

Exempt charities: registration and regulation

11      

Changes in exempt charities

(1)   

Schedule 2 to the 1993 Act (exempt charities) is amended as follows.

(2)   

In paragraph (a) (general exemption by reference to law existing prior to

Charities Act 1960 (c. 58)) after “1855” insert “(but see Note 1)”.

5

(3)   

In paragraph (b) (certain specified universities, colleges and schools)—

(a)   

before “Queen Mary and Westfield College” insert “and”; and

(b)   

omit “and the colleges of Winchester and Eton”.

(4)   

Before paragraph (i) insert—

“(h)   

a higher education corporation;”.

10

(5)   

After paragraph (i) insert—

“(j)   

a further education corporation;”.

(6)   

In paragraph (w) (exemption for institutions administered by or on behalf of

institutions exempted under preceding provisions) after “last-mentioned

institution” insert “(but see Note 2)”.

15

(7)   

Omit paragraph (x) (Church Commissioners and institutions administered by

them).

(8)   

In paragraph (y) (industrial and provident societies etc.) for the words from

“and any” onwards substitute “and which is also registered in the register of

social landlords under Part 1 of the Housing Act 1996;”.

20

(9)   

Omit paragraph (zb) (the National Lottery Charities Board).

(10)   

At the end insert—

   

Notes

1.   Paragraph (a) above does not include—

(a)   

any Investment Fund or Deposit Fund within the meaning of

25

the Church Funds Investment Measure 1958,

(b)   

any investment fund or deposit fund within the meaning of the

Methodist Church Funds Act 1960, or

(c)   

the representative body of the Welsh Church or property

administered by it.

30

2. Paragraph (w) above does not include any students’ union.”

(11)   

In section 24 of the 1993 Act (schemes to establish common investment funds),

in subsection (8) (fund is to be a charity and, if the scheme admits only exempt

charities, an exempt charity) omit the words from “; and if the scheme”

onwards.

35

(12)   

The Secretary of State may by order make such further amendments of

Schedule 2 to the 1993 Act as he considers appropriate for securing—

(a)   

that (so far as they are charities) institutions of a particular description

become or (as the case may be) cease to be exempt charities, or

(b)   

that (so far as it is a charity) a particular institution becomes or (as the

40

case may be) ceases to be an exempt charity,

   

or for removing from that Schedule an institution that has ceased to exist.

 
 

Charities Bill [HL]
Part 2 — Regulation of charities
Chapter 3 — Registration of charities

16

 

(13)   

An order under subsection (12) may only be made for the purpose mentioned

in paragraph (a) or (b) of that subsection if the Secretary of State is satisfied that

the order is desirable in the interests of ensuring appropriate or effective

regulation of the charities or charity concerned in connection with compliance

by the charity trustees of the charities or charity with their legal obligations in

5

exercising control and management of the administration of the charities or

charity.

(14)   

The Secretary of State may by order make such amendments or other

modifications of any enactment as he considers appropriate in connection

with—

10

(a)   

charities of a particular description becoming, or ceasing to be, exempt

charities, or

(b)   

a particular charity becoming, or ceasing to be, an exempt charity,

   

by virtue of any provision made by or under this section.

(15)   

In this section “exempt charity” has the same meaning as in the 1993 Act.

15

12      

Increased regulation of exempt charities under 1993 Act

The 1993 Act is amended in accordance with Schedule 5 (which has effect for

increasing the extent to which exempt charities are subject to regulation under

that Act).

13      

General duty of principal regulator in relation to exempt charity

20

(1)   

This section applies to any body or Minister of the Crown who is the principal

regulator in relation to an exempt charity.

(2)   

The body or Minister must do all that it or he reasonably can to meet the

compliance objective in relation to the charity.

(3)   

The compliance objective is to promote compliance by the charity trustees with

25

their legal obligations in exercising control and management of the

administration of the charity.

(4)   

In this section—

(a)   

“exempt charity” has the same meaning as in the 1993 Act; and

(b)   

“principal regulator”, in relation to an exempt charity, means such

30

body or Minister of the Crown as is prescribed as its principal regulator

by regulations made by the Secretary of State.

(5)   

Regulations under subsection (4)(b) may make such amendments or other

modifications of any enactment as the Secretary of State considers appropriate

for the purpose of facilitating, or otherwise in connection with, the discharge

35

by a principal regulator of the duty under subsection (2).

 
 

Charities Bill [HL]
Part 2 — Regulation of charities
Chapter 4 — Application of property cy-près

17

 

14      

Commission to consult principal regulator before exercising powers in

relation to exempt charity

After section 86 of the 1993 Act insert—

“86A    

Consultation by Commission before exercising powers in relation to

exempt charity

5

Before exercising in relation to an exempt charity any specific power

exercisable by it in relation to the charity, the Commission must consult

the charity’s principal regulator.”

Chapter 4

Application of property cy-près

10

Cy-près occasions

15      

Application cy-près by reference to current circumstances

(1)   

Section 13 of the 1993 Act (occasions for applying property cy-près) is amended

as follows.

(2)   

In subsection (1)(c), (d) and (e)(iii), for “the spirit of the gift” substitute “the

15

appropriate considerations”.

(3)   

After subsection (1) insert—

“(1A)   

In subsection (1) above “the appropriate considerations” means—

(a)   

(on the one hand) the spirit of the gift concerned, and

(b)   

(on the other) the social and economic circumstances prevailing

20

at the time of the proposed alteration of the original purposes.”

16      

Application cy-près of gifts by donors unknown or disclaiming

(1)   

Section 14 of the 1993 Act (application cy-près of gifts of donors unknown or

disclaiming) is amended as follows.

(2)   

In subsection (4) (power of court to direct that property is to be treated as

25

belonging to donors who cannot be identified) after “court”, in both places,

insert “or the Commission”.

17      

Application cy-près of gifts made in response to certain solicitations

After section 14 of the 1993 Act insert—

“14A    

Application cy-près of gifts made in response to certain solicitations

30

(1)   

This section applies to property given—

(a)   

for specific charitable purposes, and

(b)   

in response to a solicitation within subsection (2) below.

(2)   

A solicitation is within this subsection if—

(a)   

it is made for specific charitable purposes, and

35

(b)   

it is accompanied by a statement to the effect that property

given in response to it will, in the event of those purposes

 
 

Charities Bill [HL]
Part 2 — Regulation of charities
Chapter 4 — Application of property cy-près

18

 

failing, be applicable cy-près as if given for charitable purposes

generally, unless the donor makes a relevant declaration at the

time of making the gift.

(3)   

A “relevant declaration” is a declaration in writing by the donor to the

effect that, in the event of the specific charitable purposes failing, he

5

wishes the trustees holding the property to give him the opportunity to

request the return of the property in question (or a sum equal to its

value at the time of the making of the gift).

(4)   

Subsections (5) and (6) below apply if—

(a)   

a person has given property as mentioned in subsection (1)

10

above,

(b)   

the specific charitable purposes fail, and

(c)   

the donor has made a relevant declaration.

(5)   

The trustees holding the property must take the prescribed steps for the

purpose of—

15

(a)   

informing the donor of the failure of the purposes,

(b)   

enquiring whether he wishes to request the return of the

property (or a sum equal to its value), and

(c)   

if within the prescribed period he makes such a request,

returning the property (or such a sum) to him.

20

(6)   

If those trustees have taken all appropriate prescribed steps but—

(a)   

they have failed to find the donor, or

(b)   

the donor does not within the prescribed period request the

return of the property (or a sum equal to its value),

   

section 14(1) above shall apply to the property as if it belonged to a

25

donor within paragraph (b) of that subsection (application of property

where donor has disclaimed right to return of property).

(7)   

If—

(a)   

a person has given property as mentioned in subsection (1)

above,

30

(b)   

the specific charitable purposes fail, and

(c)   

the donor has not made a relevant declaration,

   

section 14(1) above shall similarly apply to the property as if it

belonged to a donor within paragraph (b) of that subsection.

(8)   

For the purposes of this section—

35

(a)   

“solicitation” means a solicitation made in any manner and

however communicated to the persons to whom it is addressed,

(b)   

it is irrelevant whether any consideration is or is to be given in

return for the property in question, and

(c)   

where any appeal consists of both solicitations that are

40

accompanied by statements within subsection (2)(b) and

solicitations that are not so accompanied, a person giving

property as a result of the appeal is to be taken to have

responded to the former solicitations and not the latter, unless

he proves otherwise.

45

(9)   

In this section “prescribed” means prescribed by regulations made by

the Commission, and any such regulations shall be published by the

Commission in such manner as it thinks fit.

 
 

Charities Bill [HL]
Part 2 — Regulation of charities
Chapter 4 — Application of property cy-près

19

 

(10)   

Subsections (7) and (10) of section 14 shall apply for the purposes of this

section as they apply for the purposes of section 14.”

Schemes

18      

Cy-près schemes

After section 14A of the 1993 Act (inserted by section 17 above) insert—

5

“14B    

Cy-près schemes

(1)   

The power of the court or the Commission to make schemes for the

application of property cy-près shall be exercised in accordance with

this section.

(2)   

Where any property given for charitable purposes is applicable cy-près,

10

the court or the Commission may make a scheme providing for the

property to be applied—

(a)   

for such charitable purposes, and

(b)   

(if the scheme provides for the property to be transferred to

another charity) by or on trust for such other charity,

15

   

as it considers appropriate, having regard to the matters set out in

subsection (3).

(3)   

The matters are—

(a)   

the spirit of the original gift,

(b)   

the desirability of securing that the property is applied for

20

charitable purposes which are close to the original purposes,

and

(c)   

the need for the relevant charity to have purposes which are

suitable and effective in the light of current social and economic

circumstances.

25

The “relevant charity” means the charity by or on behalf of which the

property is to be applied under the scheme.

(4)   

If a scheme provides for the property to be transferred to another

charity, the scheme may impose on the charity trustees of that charity a

duty to secure that the property is applied for purposes which are, so

30

far as is reasonably practicable, similar in character to the original

purposes.

(5)   

In this section references to property given include the property for the

time being representing the property originally given or property

derived from it.

35

(6)   

In this section references to the transfer of property to a charity are

references to its transfer—

(a)   

to the charity, or

(b)   

to the charity trustees, or

(c)   

to any trustee for the charity, or

40

(d)   

to a person nominated by the charity trustees to hold it in trust

for the charity,

   

as the scheme may provide.”

 
 

Charities Bill [HL]
Part 2 — Regulation of charities
Chapter 5 — Assistance and supervision of charities by court and Commission

20

 

Chapter 5

Assistance and supervision of charities by court and Commission

Suspension or removal of trustees etc. from membership

19      

Power to suspend or remove trustees etc. from membership of charity

After section 18 of the 1993 Act insert—

5

“18A    

Power to suspend or remove trustees etc. from membership of charity

(1)   

This section applies where the Commission makes—

(a)   

an order under section 18(1) above suspending from his office

or employment any trustee, charity trustee, officer, agent or

employee of a charity, or

10

(b)   

an order under section 18(2) above removing from his office or

employment any officer, agent or employee of a charity,

   

and the trustee, charity trustee, officer, agent or employee (as the case

may be) is a member of the charity.

(2)   

If the order suspends the person in question from his office or

15

employment, the Commission may also make an order suspending his

membership of the charity for the period for which he is suspended

from his office or employment.

(3)   

If the order removes the person in question from his office or

employment, the Commission may also make an order—

20

(a)   

terminating his membership of the charity, and

(b)   

prohibiting him from resuming his membership of the charity

without the Commission’s consent.

(4)   

If an application for the Commission’s consent under subsection (3)(b)

above is made five years or more after the order was made, the

25

Commission must grant the application unless satisfied that, by reason

of any special circumstances, it should be refused.”

Directions by Commission

20      

Power to give specific directions for protection of charity

After section 19 of the 1993 Act insert—

30

“19A    

Power to give specific directions for protection of charity

(1)   

This section applies where, at any time after the Commission has

instituted an inquiry under section 8 above with respect to any charity,

it is satisfied as mentioned in section 18(1)(a) or (b) above.

(2)   

The Commission may by order direct—

35

(a)   

the charity trustees,

(b)   

any trustee for the charity,

(c)   

any officer or employee of the charity, or

(d)   

(if a body corporate) the charity itself,

 
 

Charities Bill [HL]
Part 2 — Regulation of charities
Chapter 5 — Assistance and supervision of charities by court and Commission

21

 

   

to take any action specified in the order which the Commission

considers to be expedient in the interests of the charity.

(3)   

An order under this section—

(a)   

may require action to be taken whether or not it would

otherwise be within the powers exercisable by the person or

5

persons concerned, or by the charity, in relation to the

administration of the charity or to its property, but

(b)   

may not require any action to be taken which is prohibited by

any Act of Parliament or expressly prohibited by the trusts of

the charity or is inconsistent with its purposes.

10

(4)   

Anything done by a person or body under the authority of an order

under this section shall be deemed to be properly done in the exercise

of the powers mentioned in subsection (3)(a) above.

(5)   

Subsection (4) does not affect any contractual or other rights arising in

connection with anything which has been done under the authority of

15

such an order.”

21      

Power to direct application of charity property

After section 19A of the 1993 Act (inserted by section 20 above) insert—

“19B    

Power to direct application of charity property

(1)   

This section applies where the Commission is satisfied—

20

(a)   

that a person or persons in possession or control of any property

held by or on trust for a charity is or are unwilling to apply it

properly for the purposes of the charity, and

(b)   

that it is necessary or desirable to make an order under this

section for the purpose of securing a proper application of that

25

property for the purposes of the charity.

(2)   

The Commission may by order direct the person or persons concerned

to apply the property in such manner as is specified in the order.

(3)   

An order under this section—

(a)   

may require action to be taken whether or not it would

30

otherwise be within the powers exercisable by the person or

persons concerned in relation to the property, but

(b)   

may not require any action to be taken which is prohibited by

any Act of Parliament or expressly prohibited by the trusts of

the charity.

35

(4)   

Anything done by a person under the authority of an order under this

section shall be deemed to be properly done in the exercise of the

powers mentioned in subsection (3)(a) above.

(5)   

Subsection (4) does not affect any contractual or other rights arising in

connection with anything which has been done under the authority of

40

such an order.”

 
 

 
previous section contents continue
 
House of Commons home page Houses of Parliament home page House of Lords home page search page enquiries

© Parliamentary copyright 2005
Revised 11 November 2005