Charities Act 2006 (c. 50)

(The document as of February, 2008)

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(a) if the charity has both a permanent endowment and other property ("unrestricted property")--

(i) a resolution under section 74(2) must relate to both its permanent endowment and its unrestricted property, and

(ii) that section applies in relation to its unrestricted property in accordance with subsection (3) below and in relation to its permanent endowment in accordance with subsections (4) to (11) below;

(b) if all of the property of the charity is comprised in its permanent endowment, that section applies in relation to its permanent endowment in accordance with subsections (4) to (11) below.

(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) 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 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 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 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 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 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 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. "

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,

(b) it does not hold any designated land, and

"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 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 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 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), 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

(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.

(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 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.

(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) above, the trusts of the charity concerned are to be taken to have been modified in accordance with the terms of the resolution.

(12) The Minister 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--

" 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--

(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.

(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--

(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 in response to the question put to the meeting.

(5) Where--

(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 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). "

Chapter 11 Powers to spend capital and mergers

Spending of capital

43 Power to spend capital

For section 75 of the 1993 Act substitute--

" 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 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.

(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.

(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 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

(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.

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--

(a) the capital of the fund consists entirely of property given--

(i) by a particular individual,

(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.

(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.

(5) The charity trustees--

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

(a) direct the charity trustees to give public notice of the resolution in such manner as is specified in the direction, and

(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 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--

(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, economic and legal environment in which it operates).

(9) The Commission must not concur with the resolution unless it is satisfied--

(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 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--

(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 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--

(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,

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 Minister may by order amend subsection (2) above by substituting a different sum for any sum specified there.

(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 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

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 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 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 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,

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

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 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

(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) has elapsed without the Commission notifying them that it does not concur with the resolution,

(6) The fund or portion may be so expended as from such date as is specified for this purpose in the resolution.

(7) The Minister may by order amend subsection (4) above by substituting a different sum for the sum specified there.

(8) In this section--

(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

Mergers

44 Merger of charities

After section 75B of the 1993 Act (inserted by section 43 above) insert--

" Mergers

75C Register of charity mergers

(1) The Commission shall establish and maintain a register of charity mergers.

(2) The register shall be kept by the Commission in such manner as it thinks fit.

(3) The register shall contain an entry in respect of every relevant charity merger which is notified to the Commission in accordance with subsections (6) to (9) and such procedures as it may determine.

(4) In this section "relevant charity merger" means--

(a) a merger of two or more charities in connection with which one of them ("the transferee") has transferred to it all the property of the other or others, each of which (a "transferor") ceases to exist, or is to cease to exist, on or after the transfer of its property to the transferee, or

(b) a merger of two or more charities ("transferors") in connection with which both or all of them cease to exist, or are to cease to exist, on or after the transfer of all of their property to a new charity ("the transferee").

(5) In the case of a merger involving the transfer of property of any charity which has both a permanent endowment and other property ("unrestricted property") and whose trusts do not contain provision for the termination of the charity, subsection (4)(a) or (b) applies in relation to any such charity as if--

(a) the reference to all of its property were a reference to all of its unrestricted property, and

(b) any reference to its ceasing to exist were omitted.

(6) A notification under subsection (3) above may be given in respect of a relevant charity merger at any time after--

(a) the transfer of property involved in the merger has taken place, or

(b) (if more than one transfer of property is so involved) the last of those transfers has taken place.

(7) If a vesting declaration is made in connection with a relevant charity merger, a notification under subsection (3) above must be given in respect of the merger once the transfer, or the last of the transfers, mentioned in subsection (6) above has taken place.

(8) A notification under subsection (3) is to be given by the charity trustees of the transferee and must--

(a) specify the transfer or transfers of property involved in the merger and the date or dates on which it or they took place;

(b) include a statement that appropriate arrangements have been made with respect to the discharge of any liabilities of the transferor charity or charities; and

(9) The matters are--

(a) the fact that the vesting declaration in question has been made;

(b) the date when the declaration was made; and

(10) In this section and section 75D--

(a) any reference to a transfer of property includes a transfer effected by a vesting declaration; and

(b) "vesting declaration" means a declaration to which section 75E(2) below applies.

(11) Nothing in this section or section 75E or 75F applies in a case where section 69K (amalgamation of CIOs) or 69M (transfer of CIO's undertaking) applies.

75D Register of charity mergers: supplementary

(1) Subsection (2) applies to the entry to be made in the register in respect of a relevant charity merger, as required by section 75C(3) above.

(2) The entry must--

(a) specify the date when the transfer or transfers of property involved in the merger took place,

(b) if a vesting declaration was made in connection with the merger, set out the matters mentioned in section 75C(9) above, and

(3) The register shall be open to public inspection at all reasonable times.

(4) Where any information contained in the register is not in documentary form, subsection (3) above shall be construed as requiring the information to be available for public inspection in legible form at all reasonable times.

(5) In this section--

"the register" means the register of charity mergers;
"relevant charity merger" has the same meaning as in section 75C.

75E Pre-merger vesting declarations

(1) Subsection (2) below applies to a declaration which--

(a) is made by deed for the purposes of this section by the charity trustees of the transferor,

(b) is made in connection with a relevant charity merger, and

(c) is to the effect that (subject to subsections (3) and (4)) all of the transferor's property is to vest in the transferee on such date as is specified in the declaration ("the specified date").

(2) The declaration operates on the specified date to vest the legal title to all of the transferor's property in the transferee, without the need for any further document transferring it.

This is subject to subsections (3) and (4).

(3) Subsection (2) does not apply to--

(a) any land held by the transferor as security for money subject to the trusts of the transferor (other than land held on trust for securing debentures or debenture stock);

(b) any land held by the transferor under a lease or agreement which contains any covenant (however described) against assignment of the transferor's interest without the consent of some other person, unless that consent has been obtained before the specified date; or

(c) any shares, stock, annuity or other property which is only transferable in books kept by a company or other body or in a manner directed by or under any enactment.

(4) In its application to registered land within the meaning of the Land Registration Act 2002, subsection (2) has effect subject to section 27 of that Act (dispositions required to be registered).

(5) In this section "relevant charity merger" has the same meaning as in section 75C.

(6) In this section--

(a) any reference to the transferor, in relation to a relevant charity merger, is a reference to the transferor (or one of the transferors) within the meaning of section 75C above, and

(b) any reference to all of the transferor's property, where the transferor is a charity within section 75C(5), is a reference to all of the transferor's unrestricted property (within the meaning of that provision).

(7) In this section any reference to the transferee, in relation to a relevant charity merger, is a reference to--

(a) the transferee (within the meaning of section 75C above), if it is a company or other body corporate, and

(b) otherwise, to the charity trustees of the transferee (within the meaning of that section).

75F Effect of registering charity merger on gifts to transferor

(1) This section applies where a relevant charity merger is registered in the register of charity mergers.

(2) Any gift which--

(a) is expressed as a gift to the transferor, and

(b) takes effect on or after the date of registration of the merger,

takes effect as a gift to the transferee, unless it is an excluded gift.

(3) A gift is an "excluded gift" if--

(a) the transferor is a charity within section 75C(5), and

(b) the gift is intended to be held subject to the trusts on which the whole or part of the charity's permanent endowment is held.

(4) In this section--

"relevant charity merger" has the same meaning as in section 75C; and
"transferor" and "transferee" have the same meanings as in section 75E. "

Part 3 Funding for charitable, benevolent or philanthropic institutions

Chapter 1 Public charitable collections

Preliminary

45 Regulation of public charitable collections

(1) This Chapter regulates public charitable collections, which are of the following two types--

(a) collections in a public place; and

(b) door to door collections.

(2) For the purposes of this Chapter--

(a) "public charitable collection" means (subject to section 46) a charitable appeal which is made--

(i) in any public place, or

(ii) by means of visits to houses or business premises (or both);

(b) "charitable appeal" means an appeal to members of the public which is--

(i) an appeal to them to give money or other property, or

(ii) an appeal falling within subsection (4),

(or both) and which is made in association with a representation that the whole or any part of its proceeds is to be applied for charitable, benevolent or philanthropic purposes;

(c) a "collection in a public place" is a public charitable collection that is made in a public place, as mentioned in paragraph (a)(i);

(d) a "door to door collection" is a public charitable collection that is made by means of visits to houses or business premises (or both), as mentioned in paragraph (a)(ii).

(3) For the purposes of subsection (2)(b)--

(a) the reference to the giving of money is to doing so by whatever means; and

(b) it does not matter whether the giving of money or other property is for consideration or otherwise.

(4) An appeal falls within this subsection if it consists in or includes--

(a) the making of an offer to sell goods or to supply services, or

(b) the exposing of goods for sale,

to members of the public.

(5) In this section--

"business premises" means any premises used for business or other commercial purposes;
"house" includes any part of a building constituting a separate dwelling;
"public place" means--
(a)
any highway, and
(b)
(subject to subsection (6)) any other place to which, at any time when the appeal is made, members of the public have or are permitted to have access and which either--
(i)
is not within a building, or
(ii)
if within a building, is a public area within any station, airport or shopping precinct or any other similar public area.

(6) In subsection (5), paragraph (b) of the definition of "public place" does not include--

(a) any place to which members of the public are permitted to have access only if any payment or ticket required as a condition of access has been made or purchased; or

(b) any place to which members of the public are permitted to have access only by virtue of permission given for the purposes of the appeal in question.

46 Charitable appeals that are not public charitable collections

(1) A charitable appeal is not a public charitable collection if the appeal--

(a) is made in the course of a public meeting; or

(b) is made--

(i) on land within a churchyard or burial ground contiguous or adjacent to a place of public worship, or

(ii) on other land occupied for the purposes of a place of public worship and contiguous or adjacent to it,

where the land is enclosed or substantially enclosed (whether by any wall or building or otherwise); or

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