Office of Public Sector Information
PART I continued
(4) Where—
(a) subsection (1) or (2) of section 34 applies to any mortgage of land held by or in trust for a charity, but
(b) subsection (2) above has not been complied with in relation to the mortgage,
then 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 mortgage shall be valid whether or not—
(i) (where subsection (1) of that section applies) the mortgage has been sanctioned by an order of the court or of the Commissioners, or
(ii) (where subsection (2) of that section applies) 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 that subsection.
(5) In section 29(1) of the [1925 c. 18.] Settled Land Act 1925 (charitable and public trusts)—
(a) the requirement for a mortgage of land held on charitable, ecclesiastical or public trusts (as a “conveyance” of such land for the purposes of that Act) to state that it is held on such trusts shall not apply to any mortgage to which subsection (1) above applies; and
(b) the requirement imposed on a mortgagee (as a “purchaser” for those purposes), in the circumstances mentioned in section 29(1) of that Act, to see that any consents or orders requisite for authorising a transaction have been obtained shall not apply in relation to any mortgage in relation to which subsection (2) above has been complied with;
and expressions used in this subsection which are also used in that Act have the same meaning as in that Act.
(6) In this section—
“mortgage” includes a charge, and “mortgagee” shall be construed accordingly;
“land” means land in England or Wales;
“prescribed” and “registered disposition” have the same meaning as in the [1925 c. 21.] Land Registration Act 1925.
(1) Any provision—
(a) establishing or regulating a particular charity and contained in, or having effect under, any Act of Parliament, or
(b) contained in the trusts of a charity,
shall cease to have effect if and to the extent that it provides for dispositions of, or other dealings with, land held by or in trust for the charity to require the consent of the Commissioners (whether signified by order or otherwise).
(2) Any provision of an order or scheme under the [1944 c. 31.] Education Act 1944 or the [1973 c. 16.] Education Act 1973 relating to a charity shall cease to have effect if and to the extent that it requires, in relation to any sale, lease or other disposition of land held by or in trust for the charity, approval by the Commissioners or the Secretary of State of the amount for which the land is to be sold, leased or otherwise disposed of.
(3) In this section “land” means land in England or Wales.
(1) Section 32(1) shall 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 an amount which is not less than ten 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 £500, any costs incurred by the charity in connection with proving its title to the rentcharge shall be recoverable by the charity from the person or persons in whose favour the rentcharge is being released.
(3) Neither section 32(1) nor subsection (2) above applies where a rentcharge which a charity is entitled to receive is redeemed under sections 8 to 10 of the [1977 c. 30.] Rentcharges Act 1977.
(4) The Secretary of State may by order amend subsection (2) above by substituting a different sum for the sum for the time being specified there.
(5) Subsections (2) to (8) of section 27 of the 1960 Act (special procedure for redemption of charity rentcharges) shall cease to have effect.
(1) The Secretary of State may by order made with the consent of the Treasury—
(a) direct that, in the case of a trust fund consisting of property held by or in trust for a charity, any division of the fund in pursuance of section 2(1) of the [1961 c. 62.] Trustee Investments Act 1961 (trust funds to be divided so that wider-range and narrower-range investments are equal in value) shall be made so that the value of the wider-range part at the time of the division bears to the then value of the narrower-range part such proportion as is specified in the order;
(b) provide that, in its application in relation to such a trust fund, that Act shall have effect subject to such modifications so specified as the Secretary of State considers appropriate in consequence of, or in connection with, any such direction.
(2) Where, before the coming into force of an order under this section, a trust fund consisting of property held by or in trust for a charity has already been divided in pursuance of section 2(1) of that Act, the fund may, notwithstanding anything in that provision, be again divided (once only) in pursuance of that provision during the continuance in force of the order.
(3) No order shall be made under this section unless a draft of the order has been laid before and approved by a resolution of each House of Parliament.
(4) Expressions used in this section which are also used in the Trustee Investments Act 1961 have the same meaning as in that Act.
(5) In the application of this section to Scotland, “charity” means a recognised body within the meaning of section 1(7) of the [1990 c. 40.] Law Reform (Miscellaneous Provisions) (Scotland) Act 1990.
(1) The Secretary of State may by regulations made with the consent of the Treasury make, with respect to property held by or in trust for a charity, provision authorising a trustee to invest such property in any manner specified in the regulations, being a manner of investment not for the time being included in any Part of Schedule 1 to the [1961 c. 62.] Trustee Investments Act 1961.
(2) Regulations under this section may make such provision—
(a) regulating the investment of property in any manner authorised by virtue of subsection (1), and
(b) with respect to the variation and retention of investments so made,
as the Secretary of State considers appropriate.
(3) Such regulations may, in particular, make provision—
(a) imposing restrictions with respect to the proportion of the property held by or in trust for a charity which may be invested in any manner authorised by virtue of subsection (1), being either restrictions applying to investment in any such manner generally or restrictions applying to investment in any particular such manner;
(b) imposing the like requirements with respect to the obtaining and consideration of advice as are imposed by any of the provisions of section 6 of the [1961 c. 62.] Trustee Investments Act 1961 (duty of trustees in choosing investments).
(4) Any power of investment conferred by any regulations under this section—
(a) shall be in addition to, and not in derogation from, any power conferred otherwise than by such regulations; and
(b) shall not be limited by the trusts of a charity (in so far as they are not contained in any Act or instrument made under an enactment) unless it is excluded by those trusts in express terms;
but any such power shall only be exercisable by a trustee in so far as a contrary intention is not expressed in any Act or in any instrument made under an enactment and relating to the powers of the trustee.
(5) No regulations shall be made under this section unless a draft of the regulations has been laid before and approved by a resolution of each House of Parliament.
(6) In this section “property”—
(a) in England and Wales, means real or personal property of any description, including money and things in action, but does not include an interest in expectancy; and
(b) in Scotland, means property of any description (whether heritable or moveable, corporeal or incorporeal) which is presently enjoyable, but does not include a future interest, whether vested or contingent;
and any reference to property held by or in trust for a charity is a reference to property so held, whether it is for the time being in a state of investment or not.
(7) In the application of this section to Scotland, “charity” means a recognised body within the meaning of section 1(7) of the [1990 c. 40.] Law Reform (Miscellaneous Provisions) (Scotland) Act 1990.
For subsections (2) and (3) of section 30A of the 1960 Act (as amended by the [1989 c. 40.] Companies Act 1989) there shall be substituted—
“(2) Where a charity is a company, any alteration by it—
(a) of the objects clause in its memorandum of association, or
(b) of any other provision in its memorandum of association, or any provision in its articles of association, which is a provision directing or restricting the manner in which property of the company may be used or applied,
is ineffective without the prior written consent of the Commissioners.
(3) Where a company has made any such alteration in accordance with subsection (2) above and—
(a) in connection with the alteration is required by virtue of—
(i) section 6(1) of the Companies Act 1985 (delivery of documents following alteration of objects), or
(ii) that provision as applied by section 17(3) of that Act (alteration of condition in memorandum which could have been contained in articles),
to deliver to the registrar of companies a printed copy of its memorandum, as altered, or
(b) is required by virtue of section 380(1) of that Act (registration etc. of resolutions and agreements) to forward to the registrar a printed or other copy of the special resolution effecting the alteration,
the copy so delivered or forwarded by the company shall be accompanied by a copy of the Commissioners' consent.
(4) Section 6(3) of that Act (offences) shall apply to any default by a company in complying with subsection (3) above as it applies to any such default as is mentioned in that provision.”
After section 30B of the 1960 Act (as amended by the [1989 c. 40.] Companies Act 1989) there shall be inserted—
(1) Where a company is a charity—
(a) any approval given by the company for the purposes of any of the provisions of the Companies Act 1985 specified in subsection (2) below, and
(b) any affirmation by it for the purposes of section 322(2)(c) of that Act (affirmation of voidable arrangements under which assets are acquired by or from a director or person connected with him),
is ineffective without the prior written consent of the Commissioners.
(2) The provisions of the Companies Act 1985 referred to in subsection (1)(a) above are—
(a) section 312 (payment to director in respect of loss of office or retirement);
(b) section 313(1) (payment to director in respect of loss of office or retirement made in connection with transfer of undertaking or property of company);
(c) section 319(3) (incorporation in director’s service contract of term whereby his employment will or may continue for a period of more than 5 years);
(d) section 320(1) (arrangement whereby assets are acquired by or from director or person connected with him);
(e) section 337(3)(a) (provision of funds to meet certain expenses incurred by director).”
The following section shall be inserted in the 1960 Act after the section 30BA inserted by section 41 above—
Section 30(7) of the Companies Act 1985 (exemption from requirements relating to publication of name etc.) shall not, in its application to any company which is a charity, have the effect of exempting the company from the requirements of section 349(1) of that Act (company’s name to appear in its correspondence etc.).”
(1) This section applies to a charity if—
(a) its gross income in its last financial year did not exceed £5,000, and
(b) it does not hold any land on trusts which stipulate that the land is to be used for the purposes, or any particular purposes, of the charity,
and it is neither an exempt charity nor a charitable company.
(2) Subject to the following provisions of this section, the charity trustees of a charity to which this section applies may resolve for the purposes of this section—
(a) that all the property of the charity should be transferred to such other charity as is specified in the resolution, being either a registered charity or a charity which is not required to be registered;
(b) that all the property of the charity should be divided, in such manner as is specified in the resolution, between such two or more other charities as are so specified, being in each case either a registered charity or a charity which is not required to be registered;
(c) that the trusts of the charity should be modified by replacing all or any of the purposes of the charity with such other purposes, being in law charitable, as are specified in the resolution;
(d) that any provision of the trusts of the charity—
(i) relating to any of the powers exercisable by the charity trustees in the administration of the charity, or
(ii) 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.
(3) Any resolution passed under subsection (2) must be passed by a majority of not less than two-thirds of such charity trustees as vote on the resolution.
(4) The charity trustees of a charity to which this section applies (“the transferor charity”) shall not have power to pass a resolution under subsection (2)(a) or (b) unless they are satisfied—
(a) that the existing purposes of the transferor charity have ceased to be conducive to a suitable and effective application of the charity’s resources; and
(b) that the purposes of the charity or charities specified in the resolution are as similar in character to the purposes of the transferor charity as is reasonably practicable;
and before passing the resolution they must have received from the charity trustees of the charity, or (as the case may be) of each of the charities, specified in the resolution written confirmation that those trustees are willing to accept a transfer of property under this section.
(5) The charity trustees of any such charity shall not have power to pass a resolution under subsection (2)(c) unless they are satisfied—
(a) that the existing purposes of the charity (or, as the case may be, such of them as it is proposed to replace) have ceased to be conducive to a suitable and effective application of the charity’s resources; and
(b) that the purposes specified in the resolution are as similar in character to those existing purposes as is practical in the circumstances.
(6) Where charity trustees have passed a resolution under subsection (2), they shall—
(a) give public notice of the resolution in such manner as they think reasonable in the circumstances; and
(b) send a copy of the resolution to the Commissioners, together with a statement of their reasons for passing it.
(7) The Commissioners may, when considering the resolution, require the charity trustees to provide additional information or explanation—
(a) as to the circumstances in and by reference to which they have determined to act under this section, or
(b) relating to their compliance with this section in connection with the resolution;
and the Commissioners shall take into account any representations made to them by persons appearing to them to be interested in the charity where those representations are made within the period of six weeks beginning with the date when the Commissioners receive a copy of the resolution by virtue of subsection (6)(b).
(8) Where the Commissioners have so received a copy of a resolution from any charity trustees and it appears to them that the trustees have complied with this section in connection with the resolution, the Commissioners shall, within the period of three months beginning with the date when they receive the copy of the resolution, notify the trustees in writing either—
(a) that the Commissioners concur with the resolution; or
(b) that they do not concur with it.
(9) Where the Commissioners so notify their concurrence with the resolution, then—
(a) if the resolution was passed under subsection (2)(a) or (b), the charity trustees shall arrange for all the property of the transferor charity to be transferred in accordance with the resolution and on terms that any property so transferred—
(i) shall be held and applied by the charity to which it is transferred ( “the transferee charity”) for the purposes of that charity, but
(ii) shall, as property of the transferee charity, nevertheless be subject to any restrictions on expenditure to which it is subject as property of the transferor charity,
and those trustees shall arrange for it to be so transferred by such date as may be specified in the notification; and
(b) if the resolution was passed under subsection (2)(c) or (d), the trusts of the charity shall be deemed, as from such date as may be specified in the notification, to have been modified in accordance with the terms of the resolution.
(10) For the purpose of enabling any property to be transferred to a charity under this section, the Commissioners shall have power, at the request of the charity trustees of that charity, to make orders vesting any property of the transferor charity—
(a) in the charity trustees of the first-mentioned charity or in any trustee for that charity, or
(b) in any other person nominated by those charity trustees to hold the property in trust for that charity.
(11) The Secretary of State may by order amend subsection (1) by substituting a different sum for the sum for the time being specified there.
(12) In this section—
(a) “charitable company” means a charity which is a company or other body corporate; and
(b) references to the transfer of property to a charity are references to its transfer—
(i) to the charity trustees, or
(ii) to any trustee for the charity, or
(iii) to a person nominated by the charity trustees to hold it in trust for the charity,
as the charity trustees may determine.
(1) This section applies to a charity if—
(a) it has a permanent endowment which does not consist of or comprise any land, and
(b) its gross income in its last financial year did not exceed £1,000,
and it is neither an exempt charity nor a charitable company.
(2) Where the charity trustees of a charity to which this section applies are of the opinion that the property of the charity is too small, in relation to its purposes, for any useful purpose to be achieved by the expenditure of income alone, they may resolve for the purposes of this section that the charity ought to be freed from the restrictions with respect to expenditure of capital to which its permanent endowment is subject.
(3) Any resolution passed under subsection (2) must be passed by a majority of not less than two-thirds of such charity trustees as vote on the resolution.
(4) Before passing such a resolution the charity trustees must consider whether any reasonable possibility exists of effecting a transfer or division of all the charity’s property under section 43 (disregarding any such transfer or division as would, in their opinion, impose on the charity an unacceptable burden of costs).
(5) Where charity trustees have passed a resolution under subsection (2), they shall—
(a) give public notice of the resolution in such manner as they think reasonable in the circumstances; and
(b) send a copy of the resolution to the Commissioners, together with a statement of their reasons for passing it.
(6) The Commissioners may, when considering the resolution, require the charity trustees to provide additional information or explanation—
(a) as to the circumstances in and by reference to which they have determined to act under this section, or
(b) relating to their compliance with this section in connection with the resolution;
and the Commissioners shall take into account any representations made to them by persons appearing to them to be interested in the charity where those representations are made within the period of six weeks beginning with the date when the Commissioners receive a copy of the resolution by virtue of subsection (5)(b).
(7) Where the Commissioners have so received a copy of a resolution from any charity trustees and it appears to them that the trustees have complied with this section in connection with the resolution, the Commissioners shall, within the period of three months beginning with the date when they receive the copy of the resolution, notify the trustees in writing either—
(a) that the Commissioners concur with the resolution; or
(b) that they do not concur with it.
(8) Where the Commissioners so notify their concurrence with the resolution, the charity trustees shall have, as from such date as may be specified in the notification, power by virtue of this section to expend any property of the charity without regard to any such restrictions as are mentioned in subsection (2).
(9) The Secretary of State may by order amend subsection (1) by substituting a different sum for the sum for the time being specified there.
(10) In this section “charitable company” means a charity which is a company or other body corporate.
(1) Subject to the following provisions of this section, a person shall be disqualified for being a charity trustee or trustee for a charity if—
(a) he has been convicted of any offence involving dishonesty or deception;
(b) he has been adjudged bankrupt or sequestration of his estate has been awarded and (in either case) he has not been discharged;
(c) he has made a composition or arrangement with, or granted a trust deed for, his creditors and has not been discharged in respect of it;
(d) he has been removed from the office of charity trustee or trustee for a charity by an order made—
(i) by the Commissioners under section 20(1A)(i) of the 1960 Act (power to act for protection of charities) or under section 20(1)(i) of that Act (as in force before the commencement of section 8 of this Act), or
(ii) by the High Court,
on the grounds of any misconduct or mismanagement in the administration of the charity for which he was responsible or to which he was privy, or which he by his conduct contributed to or facilitated;
(e) he has been removed, under section 7 of the [1990 c. 40.] Law Reform (Miscellaneous Provisions) (Scotland) Act 1990 (powers of Court of Session to deal with management of charities), from being concerned in the management or control of any body;
(f) he is subject to a disqualification order under the [1986 c. 46.] Company Directors Disqualification Act 1986 or to an order made under section 429(2)(b) of the [1986 c. 45.] Insolvency Act 1986 (failure to pay under county court administration order).
(2) In subsection (1)—
(a) paragraph (a) applies whether the conviction occurred before or after the commencement of that subsection, but does not apply in relation to any conviction which is a spent conviction for the purposes of the [1974 c. 53.] Rehabilitation of Offenders Act 1974;
(b) paragraph (b) applies whether the adjudication of bankruptcy or the sequestration occurred before or after the commencement of that subsection;
(c) paragraph (c) applies whether the composition or arrangement was made, or the trust deed was granted, before or after the commencement of that subsection; and
(d) paragraphs (d) to (f) apply in relation to orders made and removals effected before or after the commencement of that subsection.
(3) Where (apart from this subsection) a person is disqualified under subsection (1)(b) for being a charity trustee or trustee for any charity which is a company, he shall not be so disqualified if leave has been granted under section 11 of the Company Directors Disqualification Act 1986 (undischarged bankrupts) for him to act as director of the charity; and similarly a person shall not be disqualified under subsection (1)(f) for being a charity trustee or trustee for such a charity if—
(a) in the case of a person subject to a disqualification order, leave under the order has been granted for him to act as director of the charity, or
(b) in the case of a person subject to an order under section 429(2)(b) of the [1986 c. 45.] Insolvency Act 1986, leave has been granted by the court which made the order for him to so act.
(4) The Commissioners may, on the application of any person disqualified under subsection (1), waive his disqualification either generally or in relation to a particular charity or a particular class of charities; but no such waiver may be granted in relation to any charity which is a company if—
(a) the person concerned is for the time being prohibited, by virtue of—
(i) a disqualification order under the [1986 c. 46.] Company Directors Disqualification Act 1986, or
(ii) section 11(1) or 12(2) of that Act (undischarged bankrupts; failure to pay under county court administration order),
from acting as director of the charity; and
(b) leave has not been granted for him to act as director of any other company.
(5) Without prejudice to the generality of section 13 of the [1978 c. 30.] Interpretation Act 1978 (anticipatory exercise of powers), the Commissioners may—
(a) at any time before the commencement of subsection (1) above, and
(b) on the application of a person who would be disqualified under that subsection as from that commencement,
grant that person a waiver under subsection (4) taking effect as from that commencement.
(6) Any waiver under subsection (4) shall be notified in writing to the person concerned.
(7) For the purposes of this section the Commissioners shall keep, in such manner as they think fit, a register of all persons who have been removed from office as mentioned in subsection (1)(d) either—
(a) by an order of the Commissioners made before or after the commencement of subsection (1), or
(b) by an order of the High Court made after the commencement of that subsection;
and, where any person is so removed from office by an order of the High Court, the court shall notify the Commissioners of his removal.
(8) The entries in the register kept under subsection (7) shall be available for public inspection in legible form at all reasonable times.
(1) Subject to subsection (2), any person who acts as a charity trustee or trustee for a charity while he is disqualified for being such a trustee by virtue of section 45 shall be guilty of an offence and liable—
(a) on summary conviction, to imprisonment for a term not exceeding six months or to a fine not exceeding the statutory maximum, or both;
(b) on conviction on indictment, to imprisonment for a term not exceeding two years or to a fine, or both.
(2) Subsection (1) shall not apply where—
(a) the charity concerned is a company; and
(b) the disqualified person is disqualified by virtue only of paragraph (b) or (f) of section 45(1).
(3) Any acts done as charity trustee or trustee for a charity by a person disqualified for being such a trustee by virtue of section 45 shall not be invalid by reason only of that disqualification.
(4) Where the Commissioners are satisfied—
(a) that any person has acted as charity trustee or trustee for a charity (other than an exempt charity) while disqualified for being such a trustee by virtue of section 45, and
(b) that, while so acting, he has received from the charity any sums by way of remuneration or expenses, or any benefit in kind, in connection with his acting as charity trustee or trustee for the charity,
they may by order direct him to repay to the charity the whole or part of any such sums, or (as the case may be) to pay to the charity the whole or part of the monetary value (as determined by them) of any such benefit.
(5) Subsection (4) does not apply to any sums received by way of remuneration or expenses in respect of any time when the person concerned was not disqualified for being a charity trustee or trustee for the charity.
The 1960 Act shall have effect subject to the amendments specified in Schedule 3 to this Act (which are either minor amendments or amendments consequential on the preceding provisions of this Part of this Act).
The [1872 c. 24.] Charitable Trustees Incorporation Act 1872 shall have effect subject to the amendments specified in Schedule 4 to this Act.
The [1969 c. 22.] Redundant Churches and Other Religious Buildings Act 1969 shall have effect subject to the amendments specified in Schedule 5 to this Act.
(1) Any provision in the trusts of an almshouse charity which relates to the payment by persons resident in the charity’s almshouses of contributions towards the cost of maintaining those almshouses and essential services in them shall cease to have effect if and to the extent that it provides for the amount, or the maximum amount, of such contributions to be a sum specified, approved or authorised by the Commissioners.
(2) In subsection (1)—
“almshouse” means any premises maintained as an almshouse, whether they are called an almshouse or not; and
“almshouse charity” means a charity which is authorised under its trusts to maintain almshouses.
Charities Act 1992