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Charities Bill [HL]


Charities Bill [HL]
Part 2 — Regulation of charities
Chapter 10 — Powers of unincorporated charities

43

 

(3)   

Section 74 applies in relation to unrestricted property of the charity as

if references in that section to all or any of the property of the charity

were references to all or any of its unrestricted property.

(4)   

Section 74 applies in relation to the permanent endowment of the

charity with the following modifications.

5

(5)   

References in that section to all or any of the property of the charity are

references to all or any of the property comprised in its permanent

endowment.

(6)   

If the property comprised in its permanent endowment is to be

transferred to a single charity, the charity trustees must (instead of

10

being satisfied as mentioned in section 74(4)(b)) be satisfied that the

proposed transferee charity has purposes which are substantially

similar to all of the purposes of the transferor charity.

(7)   

If the property comprised in its permanent endowment is to be

transferred to two or more charities, the charity trustees must (instead

15

of being satisfied as mentioned in section 74(4)(b)) be satisfied—

(a)   

that the proposed transferee charities, taken together, have

purposes which are substantially similar to all of the purposes

of the transferor charity, and

(b)   

that each of the proposed transferee charities has purposes

20

which are substantially similar to one or more of the purposes

of the transferor charity.

(8)   

In the case of a transfer to which subsection (7) above applies, the

resolution under section 74(2) must provide for the property comprised

in the permanent endowment of the charity to be divided between the

25

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.

(9)   

The requirement in section 74(11) shall apply in the case of every such

transfer, and in complying with that requirement the charity trustees of

a transferee charity must secure that the application of property

30

transferred to the charity takes account of any such guidance.

(10)   

Any guidance given by the Commission for the purposes of this section

may take such form and be given in such manner as the Commission

considers appropriate.

(11)   

For the purposes of sections 74 and 74A above, any reference to any

35

obligation imposed on the charity trustees by or under section 74

includes a reference to any obligation imposed on them by virtue of any

of subsections (6) to (8) above.

(12)   

Section 74(14) applies for the purposes of this section as it applies for

the purposes of section 74.”

40

41      

Power to replace purposes

After section 74B of the 1993 Act (inserted by section 40 above) insert—

“74C    

Power to replace purposes of unincorporated charity

(1)   

This section applies to a charity if—

(a)   

its gross income in its last financial year did not exceed £10,000,

45

 
 

Charities Bill [HL]
Part 2 — Regulation of charities
Chapter 10 — Powers of unincorporated charities

44

 

(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)   

The charity trustees of such a charity may resolve for the purposes of

5

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

10

resolution under subsection (2) above unless they are satisfied—

(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

15

those that are to be replaced.

(5)   

Any resolution under subsection (2) above 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),

20

they must send a copy of it to the Commission, together with a

statement of their reasons for passing it.

(7)   

Having received the copy of the resolution, the Commission—

(a)   

may direct the charity trustees to give public notice of the

resolution in such manner as is specified in the direction, and

25

(b)   

if it gives such a direction, must take into account any

representations made to it by persons appearing to it to be

interested in the charity, where those representations are made

to it within the period of 28 days beginning with the date when

public notice of the resolution is given by the charity trustees.

30

(8)   

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 this section, or

(b)   

their compliance with any obligation imposed on them by or

35

under this section in connection with the resolution.

(9)   

Subject to the provisions of section 74A above (as they apply in

accordance with subsection (10) below), a resolution under subsection

(2) above 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.

40

(10)   

Section 74A above applies to a resolution under subsection (2) of this

section as it applies to a resolution under subsection (2) of section 74

above, except that any reference to section 74(7), (8) or (9) is to be read

as a reference to subsection (7), (8) or (9) above.

(11)   

As from the time when a resolution takes effect under subsection (9)

45

above, the trusts of the charity concerned are to be taken to have been

modified in accordance with the terms of the resolution.

 
 

Charities Bill [HL]
Part 2 — Regulation of charities
Chapter 10 — Powers of unincorporated charities

45

 

(12)   

The Secretary of State may by order amend subsection (1) above by

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

there.”

42      

Power to modify powers or procedures

After section 74C of the 1993 Act (inserted by section 41 above) insert—

5

“74D    

Power to modify powers or procedures of unincorporated charity

(1)   

This 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—

10

(a)   

relating to any of the powers exercisable by the charity trustees

in the administration 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.

15

(3)   

Subsection (4) applies if the charity is an unincorporated association

with a body 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 either—

20

(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)   

by a decision taken without a vote and without any expression

of dissent.

(5)   

Where—

25

(a)   

the charity trustees have passed a resolution under subsection

(2), and

(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

30

accordance with the terms of the resolution.

(6)   

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

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

(if later) the date when any such further resolution was passed under

subsection (4).”

35

 
 

Charities Bill [HL]
Part 2 — Regulation of charities
Chapter 11 — Powers to spend capital and mergers

46

 

Chapter 11

Powers to spend capital and mergers

Spending of capital

43      

Power to spend capital

For section 75 of the 1993 Act substitute—

5

“75     

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 section 75A below (power of

larger charities to spend capital given for particular purpose) applies to

10

it.

(3)   

Where the condition in subsection (4) below 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.

15

(4)   

The condition in this subsection 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.

20

(5)   

Once the charity trustees have passed a resolution under subsection (3)

above, 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 that subsection.

(6)   

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

25

specified for this purpose in the resolution.

(7)   

In 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

30

(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,

   

excluding (in either case) so much of that endowment or part as consists

of land held on trusts which stipulate that it is to be used for the

35

purposes, or any particular purposes, of the charity.

75A     

Power of larger unincorporated charities to spend capital 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—

40

(a)   

the capital of the fund consists entirely of property given—

(i)   

by a particular individual,

 
 

Charities Bill [HL]
Part 2 — Regulation of charities
Chapter 11 — Powers to spend capital and mergers

47

 

(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 financial condition in subsection (2) below is met.

5

(2)   

The financial condition in this subsection is met if—

(a)   

the relevant charity’s gross income in its last financial year

exceeded £1,000, and

(b)   

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

(3)   

Where the condition in subsection (4) below is met in relation to the

10

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 in this subsection is that the charity trustees are satisfied

that the purposes set out in the trusts to which the fund is subject could

15

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)   

The charity trustees—

(a)   

must send a copy of any resolution under subsection (3) above

20

to the Commission, together with a statement of their reasons

for passing it, and

(b)   

may not implement the resolution except in accordance with the

following provisions of this section.

(6)   

Having received the copy of the resolution 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 by persons appearing to it to be

interested in the charity, where those representations are made

30

to it within the period of 28 days beginning with the date when

public notice of the resolution is given by the charity trustees.

(7)   

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

35

decided to act under this section, or

(b)   

their compliance with any obligation imposed on them by or

under this section in connection with the resolution.

(8)   

When considering whether to concur with the resolution the

Commission must take into account—

40

(a)   

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

donors mentioned in subsection (1)(a) above, 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,

45

economic and legal environment in which it operates).

(9)   

The Commission must not concur with the resolution unless it is

satisfied—

 
 

Charities Bill [HL]
Part 2 — Regulation of charities
Chapter 11 — Powers to spend capital and mergers

48

 

(a)   

that its implementation would accord with the spirit of the gift

or gifts mentioned in subsection (1)(a) above (even though it

would be inconsistent with the restrictions mentioned in

subsection (3) above), and

(b)   

that the charity trustees have complied with the obligations

5

imposed on them by or under this section in connection with the

resolution.

(10)   

Before the end of the period of three months beginning with the

relevant date, the Commission must notify the charity trustees in

writing either—

10

(a)   

that the Commission concurs with the resolution, or

(b)   

that it does not concur with it.

(11)   

In subsection (10) “the relevant date” means—

(a)   

in a case where the Commission directs the charity trustees

under subsection (6) above to give public notice of the

15

resolution, the date when that notice is given, and

(b)   

in any other case, the date on which the Commission receives

the copy of the resolution in accordance with subsection (5)

above.

(12)   

Where—

20

(a)   

the charity trustees are notified by the Commission that it

concurs with the resolution, or

(b)   

the period of three months mentioned in subsection (10) above

has elapsed without the Commission notifying them that it does

not concur with the resolution,

25

   

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 subsection (3).

(13)   

The Secretary of State may by order amend subsection (2) above by

substituting a different sum for any sum specified there.

30

(14)   

In this section—

(a)   

“available endowment fund” has the same meaning as in

section 75 above,

(b)   

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

(i)   

the market value of the fund as recorded in the accounts

35

for the last financial year of the relevant charity, or

(ii)   

if no such value was so recorded, the current market

value of the fund as determined on a valuation carried

out for the purpose, and

(c)   

the reference in subsection (1) to the giving of property by an

40

individual includes his giving it under his will.

75B     

Power to spend capital subject to special trusts

(1)   

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

which, as the result of a direction under section 96(5) below, is to be

treated as a separate charity (“the relevant charity”) for the purposes of

45

this section.

(2)   

Where the condition in subsection (3) below is met in relation to the

relevant charity, the charity trustees may resolve for the purposes of

 
 

Charities Bill [HL]
Part 2 — Regulation of charities
Chapter 11 — Powers to spend capital and mergers

49

 

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 in this subsection 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

5

portion of the capital, could be expended as well as income accruing to

it, rather than just such income.

(4)   

Where the market value of the fund exceeds £10,000 and the capital of

the fund consists entirely of property given—

(a)   

by a particular individual,

10

(b)   

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

(c)   

by two or more individuals or institutions in pursuit of a

common purpose,

   

subsections (5) to (11) of section 75A above apply in relation to the

resolution and that gift or gifts as they apply in relation to a resolution

15

under section 75A(3) and the gift or gifts mentioned in section

75A(1)(a).

(5)   

Where—

(a)   

the charity trustees have passed a resolution under subsection

(2) above, and

20

(b)   

(in a case where section 75A(5) to (11) above apply in

accordance with subsection (4) above) either—

(i)   

the charity trustees are notified by the Commission that

it concurs with the resolution, or

(ii)   

the period of three months mentioned in section 75A(10)

25

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 the restrictions mentioned in subsection (2).

30

(6)   

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

specified for this purpose in the resolution.

(7)   

The Secretary of State may by order amend subsection (4) above by

substituting a different sum for the sum specified there.

(8)   

In this section—

35

(a)   

“available endowment fund” has the same meaning as in

section 75 above,

(b)   

“market value” has the same meaning as in section 75A above,

and

(c)   

the reference in subsection (4) to the giving of property by an

40

individual includes his giving it under his will.”

 
 

 
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