Charities Act 1992 (c. 41)

(The document as of February, 2008)

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(3) For subsection (5) there shall be substituted--

" (5) In the case of a charity which is not an exempt charity and whose income from all sources does not in aggregate exceed £500 a year, the Commissioners may exercise their jurisdiction under this section on the application--

(a) of any one or more of the charity trustees; or

(b) of any person interested in the charity; or

(4) In subsection (6), for the words from "the Commissioners may" to "(5) above:" there shall be substituted "and the Commissioners have given the charity trustees an opportunity to make representations to them, the Commissioners may proceed as if an application for a scheme had been made by the charity:".

(5) After subsection (6) there shall be inserted--

" (6A) Where--

(a) a charity cannot apply to the Commissioners for a scheme by reason of any vacancy among the charity trustees or the absence or incapacity of any of them, but

(b) such an application is made by such number of the charity trustees as the Commissioners consider appropriate in the circumstances of the case,

the Commissioners may nevertheless proceed as if the application were an application made by the charity. "

(6) At the end of the section there shall be added--

" (13) If he thinks it expedient to do so--

(a) in consequence of changes in the value of money, or

(b) with a view to increasing the number of charities in respect of which the Commissioners may exercise their jurisdiction under this section in accordance with subsection (5) above,

the Secretary of State may by order amend that subsection by substituting a different sum for the sum for the time being specified there.

(14) Any such order shall be made by statutory instrument subject to annulment in pursuance of a resolution of either House of Parliament. "

14 Trust corporations appointed by Commissioners under 1960 Act

(1) After section 21 of the 1960 Act there shall be inserted--

" 21A Application of provisions to trust corporations appointed under s.18 or 20

In the definition of "trust corporation" contained in the following provisions, namely--

(a) section 117(xxx) of the Settled Land Act 1925,

(b) section 68(18) of the Trustee Act 1925,

(d) section 55(xxvi) of the Administration of Estates Act 1925, and

(e) section 128 of the Supreme Court Act 1981,

the reference to a corporation appointed by the court in any particular case to be a trustee includes a reference to a corporation appointed by the Commissioners under this Act to be a trustee. "

(2) The amendment made by subsection (1) above shall be deemed always to have had effect; but in the section 21A inserted by that subsection the reference to section 128 of the [1981 c. 54.] Supreme Court Act 1981 shall, in relation to any time before 1st January 1982, be construed as a reference to section 175(1) of the [1925 c. 49.] Supreme Court of Judicature (Consolidation) Act 1925.

15 Application of property cy-prehs

(1) Section 14 of the 1960 Act (application cy-prehs of gifts of donors unknown or disclaiming) shall be amended as follows.

(2) In subsection (1)--

(a) for "after such advertisements and inquiries as are reasonable, cannot" there shall be substituted " after--

(i) the prescribed advertisements and inquiries have been published and made, and

(ii) the prescribed period beginning with the publication of those advertisements has expired,

cannot " ; and

(b) for "written disclaimer" there shall be inserted "disclaimer in the prescribed form".

(3) After subsection (1) there shall be inserted--

" (1A) Where the prescribed advertisements and inquiries have been published and made by or on behalf of trustees with respect to any such property, the trustees shall not be liable to any person in respect of the property if no claim by him to be interested in it is received by them before the expiry of the period mentioned in subsection (1)(a)(ii) above. "

(4) In subsection (4)(b), for "twelve" there shall be substituted "six".

(5) After subsection (4) there shall be inserted--

" (4A) Where--

(a) any sum is, in accordance with any such directions, set aside for meeting any such claims, but

(b) the aggregate amount of any such claims actually made exceeds the relevant amount,

then, if the Commissioners so direct, each of the donors in question shall be entitled only to such proportion of the relevant amount as the amount of his claim bears to the aggregate amount referred to in paragraph (b) above; and for this purpose "the relevant amount" means the amount of the sum so set aside after deduction of any expenses properly incurred by the charity trustees in connection with claims relating to the donors' gifts. "

(6) After subsection (5) there shall be inserted--

" (5A) In this section "prescribed" means prescribed by regulations made by the Commissioners; and such regulations may, as respects the advertisements which are to be published for the purposes of subsection (1)(a) above, make provision as to the form and content of such advertisements as well as the manner in which they are to be published.

(5B) Any regulations made by the Commissioners under this section shall be published by the Commissioners in such manner as they think fit. "

16 Common deposit funds

After section 22 of the 1960 Act there shall be inserted--

" 22A Schemes to establish common deposit funds

(1) The court or the Commissioners may by order make and bring into effect schemes (in this section referred to as "common deposit schemes") for the establishment of common deposit funds under trusts which provide--

(a) for sums to be deposited by or on behalf of a charity participating in the scheme and invested under the control of trustees appointed to manage the fund; and

(b) for any such charity to be entitled (subject to the provisions of the scheme) to repayment of any sums so deposited and to interest thereon at a rate determined under the scheme.

(2) Subject to subsection (3) below, the following provisions of section 22 of this Act, namely--

(a) subsections (2) to (4), and

(b) subsections (7) to (11),

shall have effect in relation to common deposit schemes and common deposit funds as they have effect in relation to common investment schemes and common investment funds.

(3) In its application in accordance with subsection (2) above, subsection (4) of that section shall have effect with the substitution for paragraphs (b) and (c) of the following paragraphs--

" (b) for regulating as to time, amount or otherwise the right to repayment of sums deposited in the fund;

(c) for authorising a part of the income for any year to be credited to a reserve account maintained for the purpose of counteracting any losses accruing to the fund, and generally for regulating the manner in which the rate of interest on deposits is to be determined from time to time; " . "

17 Power of Commissioners to authorise certain ex gratia payments etc. by charities

After section 23 of the 1960 Act there shall be inserted--

" 23A Power to authorise certain ex gratia payments etc

(1) Subject to subsection (3) below, the Commissioners may by order exercise the same power as is exercisable by the Attorney General to authorise the charity trustees of a charity--

(a) to make any application of property of the charity, or

(b) to waive to any extent, on behalf of the charity, its entitlement to receive any property,

in a case where the charity trustees--

(i) (apart from this section) have no power to do so, but

(ii) in all the circumstances regard themselves as being under a moral obligation to do so.

(2) The power conferred on the Commissioners by subsection (1) above shall be exercisable by them under the supervision of, and in accordance with such directions as may be given by, the Attorney General; and any such directions may in particular require the Commissioners, in such circumstances as are specified in the directions--

(a) to refrain from exercising that power; or

(b) to consult the Attorney General before exercising it.

(3) Where--

(a) an application is made to the Commissioners for them to exercise that power in a case where they are not precluded from doing so by any such directions, but

(b) they consider that it would nevertheless be desirable for the application to be entertained by the Attorney General rather than by them,

they shall refer the application to the Attorney General.

(4) It is hereby declared that where, in the case of any application made to them as mentioned in subsection (3)(a) above, the Commissioners determine the application by refusing to authorise charity trustees to take any action falling within subsection (1)(a) or (b) above, that refusal shall not preclude the Attorney General, on an application subsequently made to him by the trustees, from authorising the trustees to take that action. "

18 Dormant bank accounts of charities

(1) Where the Commissioners--

(a) are informed by a relevant institution--

(i) that it holds one or more accounts in the name of or on behalf of a particular charity ("the relevant charity"), and

(ii) that the account, or (if it so holds two or more accounts) each of the accounts, is dormant, and

(b) are unable, after making reasonable inquiries, to locate that charity or any of its trustees,

they may give a direction under subsection (2).

(2) A direction under this subsection is a direction which--

(a) requires the institution concerned to transfer the amount, or (as the case may be) the aggregate amount, standing to the credit of the relevant charity in the account or accounts in question to such other charity as is specified in the direction in accordance with subsection (3); or

(b) requires the institution concerned to transfer to each of two or more other charities so specified in the direction such part of that amount or aggregate amount as is there specified in relation to that charity.

(3) The Commissioners may specify in a direction under subsection (2) such other charity or charities as they consider appropriate, having regard, in a case where the purposes of the relevant charity are known to them, to those purposes and to the purposes of the other charity or charities; but the Commissioners shall not so specify any charity unless they have received from the charity trustees written confirmation that those trustees are willing to accept the amount proposed to be transferred to the charity.

(4) Any amount received by a charity by virtue of this section shall be received by the charity on terms that--

(a) it shall be held and applied by the charity for the purposes of the charity, but

(b) it shall, as property of the charity, nevertheless be subject to any restrictions on expenditure to which it was subject as property of the relevant charity.

(5) Where--

(a) the Commissioners have been informed as mentioned in subsection (1)(a) by any relevant institution, and

(b) before any transfer is made by the institution in pursuance of a direction under subsection (2), the institution has, by reason of any circumstances, cause to believe that the account, or (as the case may be) any of the accounts, held by it in the name of or on behalf of the relevant charity is no longer dormant,

the institution shall forthwith notify those circumstances in writing to the Commissioners; and, if it appears to the Commissioners that the account or accounts in question is or are no longer dormant, they shall revoke any direction under subsection (2) which has previously been given by them to the institution with respect to the relevant charity.

(6) The receipt of any charity trustees or trustee for a charity in respect of any amount received from a relevant institution by virtue of this section shall be a complete discharge of the institution in respect of that amount.

(7) No obligation as to secrecy or other restriction on disclosure (however imposed) shall preclude a relevant institution from disclosing any information to the Commissioners for the purpose of enabling them to discharge their functions under this section.

(8) For the purposes of this section--

(a) an account is dormant if no transaction, other than--

(i) a transaction consisting in a payment into the account, or

(ii) a transaction which the institution holding the account has itself caused to be effected,

has been effected in relation to the account within the period of five years immediately preceding the date when the Commissioners are informed as mentioned in paragraph (a) of subsection (1);

(b) a "relevant institution" means--

(i) the Bank of England;

(ii) an institution which is authorised by the Bank of England to operate a deposit-taking business under Part I of the [1987 c. 22.] Banking Act 1987;

(iii) a building society which is authorised by the Building Societies Commission under section 9 of the [1986 c. 53.] Building Societies Act 1986 to raise money from its members; or

(iv) such other institution mentioned in Schedule 2 to the [1987 c. 22.] Banking Act 1987 as the Secretary of State may prescribe by regulations; and

(i) to the charity trustees, or

(ii) to any trustee for the charity,

as the charity trustees may determine (and any reference to any amount received by a charity shall be construed accordingly).

(9) For the purpose of determining the matters in respect of which any of the powers conferred by section 6 or 7 of the 1960 Act (power of Commissioners to institute inquiries or obtain information) may be exercised it shall be assumed that the Commissioners have no functions under this section in relation to accounts to which this subsection applies (with the result that, for example, a relevant institution shall not, in connection with the functions of the Commissioners under this section, be required under section 6(3)(a) of that Act to furnish any statements, or answer any questions or inquiries, with respect to any such accounts held by the institution).

This subsection applies to accounts which are dormant accounts by virtue of subsection (8)(a) above but would not be such accounts if sub-paragraph (i) of that provision were omitted.

(10) Subsection (1) shall not apply to any account held in the name of or on behalf of an exempt charity.

Charity accounts

19 Duty to keep accounting records

(1) The charity trustees of a charity shall ensure that accounting records are kept in respect of the charity which are sufficient to show and explain all the charity's transactions, and which are such as to--

(a) disclose at any time, with reasonable accuracy, the financial position of the charity at that time, and

(b) enable the trustees to ensure that, where any statements of accounts are prepared by them under section 20(1), those statements of accounts comply with the requirements of regulations under that provision.

(2) The accounting records shall in particular contain--

(a) entries showing from day to day all sums of money received and expended by the charity, and the matters in respect of which the receipt and expenditure takes place; and

(b) a record of the assets and liabilities of the charity.

(3) The charity trustees of a charity shall preserve any accounting records made for the purposes of this section in respect of the charity for at least six years from the end of the financial year of the charity in which they are made.

(4) Where a charity ceases to exist within the period of six years mentioned in subsection (3) as it applies to any accounting records, the obligation to preserve those records in accordance with that subsection shall continue to be discharged by the last charity trustees of the charity, unless the Commissioners consent in writing to the records being destroyed or otherwise disposed of.

(5) Nothing in this section applies to a charity which is a company.

20 Annual statements of accounts

(1) The charity trustees of a charity shall (subject to subsection (3)) prepare in respect of each financial year of the charity a statement of accounts complying with such requirements as to its form and contents as may be prescribed by regulations made by the Secretary of State.

(2) Without prejudice to the generality of subsection (1), regulations under that subsection may make provision--

(a) for any such statement to be prepared in accordance with such methods and principles as are specified or referred to in the regulations;

(b) as to any information to be provided by way of notes to the accounts;

and regulations under that subsection may also make provision for determining the financial years of a charity for the purposes of this Part and any regulations made under it.

(3) Where a charity's gross income in any financial year does not exceed £25,000, the charity trustees may, in respect of that year, elect to prepare the following, namely--

(a) a receipts and payments account, and

(b) a statement of assets and liabilities,

instead of a statement of accounts under subsection (1).

(4) The charity trustees of a charity shall preserve--

(a) any statement of accounts prepared by them under subsection (1), or

(b) any account and statement prepared by them under subsection (3),

for at least six years from the end of the financial year to which any such statement relates or (as the case may be) to which any such account and statement relate.

(5) Subsection (4) of section 19 shall apply in relation to the preservation of any such statement or account and statement as it applies in relation to the preservation of any accounting records (the references to subsection (3) of that section being read as references to subsection (4) above).

(6) The Secretary of State may by order amend subsection (3) above by substituting a different sum for the sum for the time being specified there.

(7) Nothing in this section applies to a charity which is a company.

21 Annual audit or examination of charity accounts

(1) Subsection (2) applies to a financial year of a charity ("the relevant year") if the charity's gross income or total expenditure in any of the following, namely--

(a) the relevant year,

(b) the financial year of the charity immediately preceding the relevant year (if any), and

exceeds £100,000.

(2) If this subsection applies to a financial year of a charity, the accounts of the charity for that year shall be audited by a person who--

(a) is, in accordance with section 25 of the [1989 c. 40.] Companies Act 1989 (eligibility for appointment), eligible for appointment as a company auditor, or

(b) is a member of a body for the time being specified in regulations under section 22 below and is under the rules of that body eligible for appointment as auditor of the charity.

(3) If subsection (2) does not apply to a financial year of a charity, then (subject to subsection (4)) the accounts of the charity for that year shall, at the election of the charity trustees, either--

(a) be examined by an independent examiner, that is to say an independent person who is reasonably believed by the trustees to have the requisite ability and practical experience to carry out a competent examination of the accounts, or

(b) be audited by such a person as is mentioned in subsection (2).

(4) Where it appears to the Commissioners--

(a) that subsection (2), or (as the case may be) subsection (3), has not been complied with in relation to a financial year of a charity within ten months from the end of that year, or

(b) that, although subsection (2) does not apply to a financial year of a charity, it would nevertheless be desirable for the accounts of the charity for that year to be audited by such a person as is mentioned in that subsection,

the Commissioners may by order require the accounts of the charity for that year to be audited by such a person as is mentioned in that subsection.

(5) If the Commissioners make an order under subsection (4) with respect to a charity, then unless--

(a) the order is made by virtue of paragraph (b) of that subsection, and

(b) the charity trustees themselves appoint an auditor in accordance with the order,

the auditor shall be a person appointed by the Commissioners.

(6) The expenses of any audit carried out by an auditor appointed by the Commissioners under subsection (5), including the auditor's remuneration, shall be recoverable by the Commissioners--

(a) from the charity trustees of the charity concerned, who shall be personally liable, jointly and severally, for those expenses; or

(b) to the extent that it appears to the Commissioners not to be practical to seek recovery of those expenses in accordance with paragraph (a), from the funds of the charity.

(7) The Commissioners may--

(a) give guidance to charity trustees in connection with the selection of a person for appointment as an independent examiner;

(b) give such directions as they think appropriate with respect to the carrying out of an examination in pursuance of subsection (3)(a);

and any such guidance or directions may either be of general application or apply to a particular charity only.

(8) The Secretary of State may by order amend subsection (1) by substituting a different sum for the sum for the time being specified there.

(9) Nothing in this section applies to a charity which is a company; but section 8(3) to (6) of the 1960 Act (power of Commissioners to require condition and accounts of charity to be investigated and audited) shall continue to apply to such a charity.

22 Supplementary provisions relating to audits etc

(1) The Secretary of State may by regulations make provision--

(a) specifying one or more bodies for the purposes of section 21(2)(b);

(b) with respect to the duties of an auditor carrying out an audit under section 21, including provision with respect to the making by him of a report on--

(i) the statement of accounts prepared for the financial year in question under section 20(1), or

(ii) the account and statement so prepared under section 20(3),

as the case may be;

(c) with respect to the making by an independent examiner of a report in respect of an examination carried out by him under section 21;

(d) conferring on such an auditor or on an independent examiner a right of access with respect to books, documents and other records (however kept) which relate to the charity concerned;

(e) entitling such an auditor or an independent examiner to require, in the case of a charity, information and explanations from past or present charity trustees or trustees for the charity, or from past or present officers or employees of the charity;

(f) enabling the Commissioners, in circumstances specified in the regulations, to dispense with the requirements of section 21(2) or (3) in the case of a particular charity or in the case of any particular financial year of a charity.

(2) If any person fails to afford an auditor or an independent examiner any facility to which he is entitled by virtue of subsection (1)(d) or (e), the Commissioners may by order give--

(a) to that person, or

(b) to the charity trustees for the time being of the charity concerned,

such directions as the Commissioners think appropriate for securing that the default is made good.

(3) Section 727 of the [1985 c. 6.] Companies Act 1985 (power of court to grant relief in certain cases) shall have effect in relation to an auditor or independent examiner appointed by a charity in pursuance of section 21 above as it has effect in relation to a person employed as auditor by a company within the meaning of that Act.

23 Annual reports

(1) The charity trustees of a charity shall prepare in respect of each financial year of the charity an annual report containing--

(a) such a report by the trustees on the activities of the charity during that year, and

(b) such other information relating to the charity or to its trustees or officers,

as may be prescribed by regulations made by the Secretary of State.

(2) Without prejudice to the generality of subsection (1), regulations under that subsection may make provision--

(a) for any such report as is mentioned in paragraph (a) of that subsection to be prepared in accordance with such principles as are specified or referred to in the regulations;

(b) enabling the Commissioners to dispense with any requirement prescribed by virtue of subsection (1)(b) in the case of a particular charity or a particular class of charities, or in the case of a particular financial year of a charity or of any class of charities.

(3) The annual report required to be prepared under this section in respect of any financial year of a charity shall be transmitted to the Commissioners by the charity trustees--

(a) within ten months from the end of that year, or

(b) within such longer period as the Commissioners may for any special reason allow in the case of that report.

(4) Subject to subsection (5), any such annual report shall have attached to it the statement of accounts prepared for the financial year in question under section 20(1) or (as the case may be) the account and statement so prepared under section 20(3), together with--

(a) where the accounts of the charity for that year have been audited under section 21, a copy of the report made by the auditor on that statement of accounts or (as the case may be) on that account and statement;

(b) where the accounts of the charity for that year have been examined under section 21, a copy of the report made by the independent examiner in respect of the examination carried out by him under that section.

(5) Subsection (4) does not apply to a charity which is a company, and any annual report transmitted by the charity trustees of such a charity under subsection (3) shall instead have attached to it a copy of the charity's annual accounts prepared for the financial year in question under Part VII of the Companies Act 1985, together with a copy of the auditors' report on those accounts.

(6) Any annual report transmitted to the Commissioners under subsection (3), together with the documents attached to it, shall be kept by the Commissioners for such period as they think fit.

24 Special provision as respects accounts and annual reports of exempt and other excepted charities

(1) Nothing in sections 19 to 23 applies to any exempt charity; but section 32(1) and (2) of the 1960 Act (general obligation to keep accounts) shall continue to apply to any such charity.

(2) Nothing in sections 21 to 23 applies to any charity which--

(a) falls within section 4(4)(c) of the 1960 Act (certain charities with an annual income not exceeding £1,000), and

(b) is not registered.

(3) Except in accordance with subsection (6) below, nothing in section 23 applies to any charity (other than an exempt charity or a charity which falls within section 4(4)(c) of the 1960 Act) which--

(a) is excepted by section 4(4) of that Act (charities not required to be registered), and

(b) is not registered.

(4) If requested to do so by the Commmissioners, the charity trustees of any such charity as is mentioned in subsection (3) above shall prepare an annual report in respect of such financial year of the charity as is specified in the Commissioners' request.

(5) Any report prepared under subsection (4) above shall contain--

(a) such a report by the charity trustees on the activities of the charity during the year in question, and

(b) such other information relating to the charity or to its trustees or officers,

as may be prescribed by regulations made under section 23(1) in relation to annual reports prepared under that provision.

(6) Subsections (3) to (6) of section 23 shall apply to any report required to be prepared under subsection (4) above as if it were an annual report required to be prepared under subsection (1) of that section.

(7) Any reference in this section to a charity which falls within section 4(4)(c) of the 1960 Act includes a reference to a charity which falls within that provision but is also excepted from registration by section 4(4)(b) of that Act (charities excepted by order or regulations).

25 Public inspection of annual reports etc

(1) Any annual report or other document kept by the Commissioners in pursuance of section 23(6) shall be open to public inspection at all reasonable times--

(a) during the period for which it is so kept; or

(b) if the Commissioners so determine, during such lesser period as they may specify.

(2) Section 9 of the 1960 Act (supply by Commissioners of copies of documents open to public inspection) shall have effect as if the reference to that Act included a reference to subsection (1) above.

(3) Where any person--

(a) requests the charity trustees of a charity in writing to provide him with a copy of the charity's most recent accounts, and

(b) pays them such reasonable fee (if any) as they may require in respect of the costs of complying with the request,

those trustees shall comply with the request within the period of two months beginning with the date on which it is made.

(4) In subsection (3) the reference to a charity's most recent accounts is--

(a) in the case of a charity other than one falling within any of paragraphs (b) to (d) below, a reference to the statement of accounts or account and statement prepared in pursuance of section 20(1) or (3) in respect of the last financial year of the charity the accounts for which have been audited or examined under section 21;

(b) in the case of such a charity as is mentioned in section 24(2), a reference to the statement of accounts or account and statement prepared in pursuance of section 20(1) or (3) in respect of the last financial year of the charity in respect of which a statement of accounts or account and statement has or have been so prepared;

(c) in the case of a charity which is a company, a reference to the annual accounts of the company most recently audited under Part VII of the [1985 c. 6.] Companies Act 1985; and

(d) in the case of an exempt charity, a reference to the accounts of the charity most recently audited in pursuance of any statutory or other requirement or, if its accounts are not required to be audited, the accounts most recently prepared in respect of the charity.

26 Annual returns by registered charities

(1) Every registered charity shall prepare in respect of each of its financial years an annual return in such form, and containing such information, as may be prescribed by regulations made by the Commissioners.

(2) Any such return shall be transmitted to the Commissioners by the date by which the charity trustees are, by virtue of section 23(3), required to transmit to them the annual report required to be prepared in respect of the financial year in question.

(3) The Commissioners may dispense with the requirements of subsection (1) in the case of a particular charity or a particular class of charities, or in the case of a particular financial year of a charity or of any class of charities.

27 Offences

Any person who, without reasonable excuse, is persistently in default in relation to any requirement imposed--

(a) by section 23(3) (taken with section 23(4) or (5), as the case may require), or

(b) by section 25(3) or 26(2),

shall be guilty of an offence and liable on summary conviction to a fine not exceeding the fourth level on the standard scale.

Charity proceedings

28 Power of Commissioners to bring proceedings with respect to charities

After section 26 of the 1960 Act there shall be inserted--

" 26A Power of Commissioners to bring proceedings with respect to charities

(1) Subject to subsection (2) below, the Commissioners may exercise the same powers with respect to--

(a) the taking of legal proceedings with reference to charities or the property or affairs of charities, or

(b) the compromise of claims with a view to avoiding or ending such proceedings,

as are exercisable by the Attorney General acting ex officio.

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