Charities Act 1993 (c. 10)

(The document as of February, 2008)

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(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 European deposit-taker as defined in regulation 82(3) of the [S.I. 1992/3218.] Banking Coordination (Second Council Directive) Regulations 1992;

(iv) 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

(v) such other institution mentioned in Schedule 2 to the 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 8 or 9 above 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 8(3)(a) above 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) above shall not apply to any account held in the name of or on behalf of an exempt charity.

29 Power to advise charity trustees

(1) The Commissioners may on the written application of any charity trustee give him their opinion or advice on any matter affecting the performance of his duties as such.

(2) A charity trustee or trustee for a charity acting in accordance with the opinion or advice of the Commissioners given under this section with respect to the charity shall be deemed, as regards his responsibility for so acting, to have acted in accordance with his trust, unless, when he does so, either--

(a) he knows or has reasonable cause to suspect that the opinion or advice was given in ignorance of material facts; or

(b) the decision of the court has been obtained on the matter or proceedings are pending to obtain one.

30 Powers for preservation of charity documents

(1) The Commissioners may provide books in which any deed, will or other document relating to a charity may be enrolled.

(2) The Commissioners may accept for safe keeping any document of or relating to a charity, and the charity trustees or other persons having the custody of documents of or relating to a charity (including a charity which has ceased to exist) may with the consent of the Commissioners deposit them with the Commissioners for safe keeping, except in the case of documents required by some other enactment to be kept elsewhere.

(3) Where a document is enrolled by the Commissioners or is for the time being deposited with them under this section, evidence of its contents may be given by means of a copy certified by any officer of the Commissioners generally or specially authorised by them to act for this purpose; and a document purporting to be such a copy shall be received in evidence without proof of the official position, authority or handwriting of the person certifying it or of the original document being enrolled or deposited as aforesaid.

(4) Regulations made by the Secretary of State may make provision for such documents deposited with the Commissioners under this section as may be prescribed by the regulations to be destroyed or otherwise disposed of after such period or in such circumstances as may be so prescribed.

(5) Subsections (3) and (4) above shall apply to any document transmitted to the Commissioners under section 9 above and kept by them under subsection (3) of that section, as if the document had been deposited with them for safe keeping under this section.

31 Power to order taxation of solicitor's bill

(1) The Commissioners may order that a solicitor's bill of costs for business done for a charity, or for charity trustees or trustees for a charity, shall be taxed, together with the costs of the taxation, by a taxing officer in such division of the High Court as may be specified in the order, or by the taxing officer of any other court having jurisdiction to order the taxation of the bill.

(2) On any order under this section for the taxation of a solicitor's bill the taxation shall proceed, and the taxing officer shall have the same powers and duties, and the costs of the taxation shall be borne, as if the order had been made, on the application of the person chargeable with the bill, by the court in which the costs are taxed.

(3) No order under this section for the taxation of a solicitor's bill shall be made after payment of the bill unless the Commissioners are of opinion that it contains exorbitant charges; and no such order shall in any case be made where the solicitor's costs are not subject to taxation on an order of the High Court by reason either of an agreement as to his remuneration or the lapse of time since payment of the bill.

Legal proceedings relating to charities

32 Proceedings by Commissioners

(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.

(2) Subsection (1) above does not apply to the power of the Attorney General under section 63(1) below to present a petition for the winding up of a charity.

(3) The practice and procedure to be followed in relation to any proceedings taken by the Commissioners under subsection (1) above shall be the same in all respects (and in particular as regards costs) as if they were proceedings taken by the Attorney General acting ex officio.

(4) No rule of law or practice shall be taken to require the Attorney General to be a party to any such proceedings.

(5) The powers exercisable by the Commissioners by virtue of this section shall be exercisable by them of their own motion, but shall be exercisable only with the agreement of the Attorney General on each occasion.

33 Proceedings by other persons

(1) Charity proceedings may be taken with reference to a charity either by the charity, or by any of the charity trustees, or by any person interested in the charity, or by any two or more inhabitants of the area of the charity if it is a local charity, but not by any other person.

(2) Subject to the following provisions of this section, no charity proceedings relating to a charity (other than an exempt charity) shall be entertained or proceeded with in any court unless the taking of the proceedings is authorised by order of the Commissioners.

(3) The Commissioners shall not, without special reasons, authorise the taking of charity proceedings where in their opinion the case can be dealt with by them under the powers of this Act other than those conferred by section 32 above.

(4) This section shall not require any order for the taking of proceedings in a pending cause or matter or for the bringing of any appeal.

(5) Where the foregoing provisions of this section require the taking of charity proceedings to be authorised by an order of the Commissioners, the proceedings may nevertheless be entertained or proceeded with if, after the order had been applied for and refused, leave to take the proceedings was obtained from one of the judges of the High Court attached to the Chancery Division.

(6) Nothing in the foregoing subsections shall apply to the taking of proceedings by the Attorney General, with or without a relator, or to the taking of proceedings by the Commissioners in accordance with section 32 above.

(7) Where it appears to the Commissioners, on an application for an order under this section or otherwise, that it is desirable for legal proceedings to be taken with reference to any charity (other than an exempt charity) or its property or affairs, and for the proceedings to be taken by the Attorney General, the Commissioners shall so inform the Attorney General, and send him such statements and particulars as they think necessary to explain the matter.

(8) In this section "charity proceedings" means proceedings in any court in England or Wales brought under the court's jurisdiction with respect to charities, or brought under the court's jurisdiction with respect to trusts in relation to the administration of a trust for charitable purposes.

34 Report of s. 8 inquiry to be evidence in certain proceedings

(1) A copy of the report of the person conducting an inquiry under section 8 above shall, if certified by the Commissioners to be a true copy, be admissible in any proceedings to which this section applies--

(a) as evidence of any fact stated in the report; and

(b) as evidence of the opinion of that person as to any matter referred to in it.

(2) This section applies to--

(a) any legal proceedings instituted by the Commissioners under this Part of this Act; and

(b) any legal proceedings instituted by the Attorney General in respect of a charity.

(3) A document purporting to be a certificate issued for the purposes of subsection (1) above shall be received in evidence and be deemed to be such a certificate, unless the contrary is proved.

Meaning of "trust corporation"

35 Application of provisions to trust corporations appointed under s. 16 or 18

(1) In the definition of "trust corporation" contained in the following provisions--

(a) section 117(xxx) of the [1925 c. 18.] Settled Land Act 1925,

(b) section 68(18) of the [1925 c. 19.] Trustee Act 1925,

(d) section 55(xxvi) of the [1925 c. 23.] Administration of Estates Act 1925, and

(e) section 128 of the [1981 c. 54.] 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) This section shall be deemed always to have had effect; but the reference to section 128 of the 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.

Part V Charity Land

36 Restrictions on dispositions

(1) Subject to the following provisions of this section and section 40 below, no land held by or in trust for a charity shall be sold, leased or otherwise disposed of without an order of the court or of the Commissioners.

(2) Subsection (1) above shall not apply to a disposition of such land if--

(a) the disposition is made to a person who is not--

(i) a connected person (as defined in Schedule 5 to this Act), or

(ii) a trustee for, or nominee of, a connected person; and

(b) the requirements of subsection (3) or (5) below have been complied with in relation to it.

(3) Except where the proposed disposition is the granting of such a lease as is mentioned in subsection (5) below, the charity trustees must, before entering into an agreement for the sale, or (as the case may be) for a lease or other disposition, of the land--

(a) obtain and consider a written report on the proposed disposition from a qualified surveyor instructed by the trustees and acting exclusively for the charity;

(b) advertise the proposed disposition for such period and in such manner as the surveyor has advised in his report (unless he has there advised that it would not be in the best interests of the charity to advertise the proposed disposition); and

(c) decide that they are satisfied, having considered the surveyor's report, that the terms on which the disposition is proposed to be made are the best that can reasonably be obtained for the charity.

(4) For the purposes of subsection (3) above a person is a qualified surveyor if--

(a) he is a fellow or professional associate of the Royal Institution of Chartered Surveyors or of the Incorporated Society of Valuers and Auctioneers or satisfies such other requirement or requirements as may be prescribed by regulations made by the Secretary of State; and

(b) he is reasonably believed by the charity trustees to have ability in, and experience of, the valuation of land of the particular kind, and in the particular area, in question;

and any report prepared for the purposes of that subsection shall contain such information, and deal with such matters, as may be prescribed by regulations so made.

(5) Where the proposed disposition is the granting of a lease for a term ending not more than seven years after it is granted (other than one granted wholly or partly in consideration of a fine), the charity trustees must, before entering into an agreement for the lease--

(a) obtain and consider the advice on the proposed disposition of a person who is reasonably believed by the trustees to have the requisite ability and practical experience to provide them with competent advice on the proposed disposition; and

(b) decide that they are satisfied, having considered that person's advice, that the terms on which the disposition is proposed to be made are the best that can reasonably be obtained for the charity.

(6) Where--

(a) any land is held by or in trust for a charity, and

(b) the trusts on which it is so held stipulate that it is to be used for the purposes, or any particular purposes, of the charity,

then (subject to subsections (7) and (8) below and without prejudice to the operation of the preceding provisions of this section) the land shall not be sold, leased or otherwise disposed of unless the charity trustees have previously--

(i) given public notice of the proposed disposition, inviting representations to be made to them within a time specified in the notice, being not less than one month from the date of the notice; and

(ii) taken into consideration any representations made to them within that time about the proposed disposition.

(7) Subsection (6) above shall not apply to any such disposition of land as is there mentioned if--

(a) the disposition is to be effected with a view to acquiring by way of replacement other property which is to be held on the trusts referred to in paragraph (b) of that subsection; or

(b) the disposition is the granting of a lease for a term ending not more than two years after it is granted (other than one granted wholly or partly in consideration of a fine).

(8) The Commissioners may direct--

(a) that subsection (6) above shall not apply to dispositions of land held by or in trust for a charity or class of charities (whether generally or only in the case of a specified class of dispositions or land, or otherwise as may be provided in the direction), or

(b) that that subsection shall not apply to a particular disposition of land held by or in trust for a charity,

if, on an application made to them in writing by or on behalf of the charity or charities in question, the Commissioners are satisfied that it would be in the interests of the charity or charities for them to give the direction.

(9) The restrictions on disposition imposed by this section apply notwithstanding anything in the trusts of a charity; but nothing in this section applies--

(a) to any disposition for which general or special authority is expressly given (without the authority being made subject to the sanction of an order of the court) by any statutory provision contained in or having effect under an Act of Parliament or by any scheme legally established; or

(b) to any disposition of land held by or in trust for a charity which--

(i) is made to another charity otherwise than for the best price that can reasonably be obtained, and

(ii) is authorised to be so made by the trusts of the first-mentioned charity; or

(c) to the granting, by or on behalf of a charity and in accordance with its trusts, of a lease to any beneficiary under those trusts where the lease--

(i) is granted otherwise than for the best rent that can reasonably be obtained; and

(ii) is intended to enable the demised premises to be occupied for the purposes, or any particular purposes, of the charity.

(10) Nothing in this section applies--

(a) to any disposition of land held by or in trust for an exempt charity;

(b) to any disposition of land by way of mortgage or other security; or

(11) In this section "land" means land in England or Wales.

37 Supplementary provisions relating to dispositions

(1) Any of the following instruments, namely--

(a) any contract for the sale, or for a lease or other disposition, of land which is held by or in trust for a charity, and

(b) any conveyance, transfer, lease or other instrument effecting a disposition of such land,

shall state--

(i) that the land is held by or in trust for a charity,

(ii) whether the charity is an exempt charity and whether the disposition is one falling within paragraph (a), (b) or (c) of subsection (9) of section 36 above, and

(iii) if it is not an exempt charity and the disposition is not one falling within any of those paragraphs, that the land is land to which the restrictions on disposition imposed by that section apply.

(2) Where any land held by or in trust for a charity is sold, leased or otherwise disposed of by a disposition to which subsection (1) or (2) of section 36 above applies, the charity trustees shall certify in the instrument by which the disposition is effected--

(a) (where subsection (1) of that section applies) that the disposition has been sanctioned by an order of the court or of the Commissioners (as the case may be), or

(b) (where subsection (2) of that section applies) that the charity trustees have power under the trusts of the charity to effect the disposition, and that they have complied with the provisions of that section so far as applicable to it.

(3) Where subsection (2) above has been complied with in relation to any disposition of land, then in favour of a person who (whether under the disposition or afterwards) acquires an interest in the land for money or money's worth, it shall be conclusively presumed that the facts were as stated in the certificate.

(4) Where--

(a) any land held by or in trust for a charity is sold, leased or otherwise disposed of by a disposition to which subsection (1) or (2) of section 36 above applies, but

(b) subsection (2) above has not been complied with in relation to the disposition,

then in favour of a person who (whether under the disposition or afterwards) in good faith acquires an interest in the land for money or money's worth, the disposition shall be valid whether or not--

(i) the disposition has been sanctioned by an order of the court or of the Commissioners, or

(ii) the charity trustees have power under the trusts of the charity to effect the disposition and have complied with the provisions of that section so far as applicable to it.

(5) Any of the following instruments, namely--

(a) any contract for the sale, or for a lease or other disposition, of land which will, as a result of the disposition, be held by or in trust for a charity, and

(b) any conveyance, transfer, lease or other instrument effecting a disposition of such land,

shall state--

(i) that the land will, as a result of the disposition, be held by or in trust for a charity,

(ii) whether the charity is an exempt charity, and

(iii) if it is not an exempt charity, that the restrictions on disposition imposed by section 36 above will apply to the land (subject to subsection (9) of that section).

(6) In section 29(1) of the [1925 c. 18.] Settled Land Act 1925 (charitable and public trusts)--

(a) the requirement for a conveyance of land held on charitable, ecclesiastical or public trusts to state that it is held on such trusts shall not apply to any instrument to which subsection (1) above applies; and

(b) the requirement imposed on a purchaser, 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 disposition 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.

(7) Where--

(a) the disposition to be effected by any such instrument as is mentioned in subsection (1)(b) or (5)(b) above will be a registered disposition, or

(b) any such instrument will on taking effect be an instrument to which section 123(1) of the [1925 c. 21.] Land Registration Act 1925 (compulsory registration of title) applies,

the statement which, by virtue of subsection (1) or (5) above, is to be contained in the instrument shall be in such form as may be prescribed.

(8) Where--

(a) an application is duly made--

(i) for registration of a disposition of registered land, or

(ii) for registration of a person's title under a disposition of unregistered land, and

(b) the instrument by which the disposition is effected contains a statement complying with subsections (5) and (7) above, and

the registrar shall enter in the register, in respect of the land, a restriction in such form as may be prescribed.

(9) Where--

(a) any such restriction is entered in the register in respect of any land, and

(b) the charity by or in trust for which the land is held becomes an exempt charity,

the charity trustees shall apply to the registrar for the restriction to be withdrawn; and on receiving any application duly made under this subsection the registrar shall withdraw the restriction.

(10) Where--

(a) any registered land is held by or in trust for an exempt charity and the charity ceases to be an exempt charity, or

(b) any registered land becomes, as a result of a declaration of trust by the registered proprietor, land held in trust for a charity (other than an exempt charity),

the charity trustees shall apply to the registrar for such a restriction as is mentioned in subsection (8) above to be entered in the register in respect of the land; and on receiving any application duly made under this subsection the registrar shall enter such a restriction in the register in respect of the land.

(11) In this section--

(a) references to a disposition of land do not include references to--

(i) a disposition of land by way of mortgage or other security,

(ii) any disposition of an advowson, or

(iii) any release of a rentcharge falling within section 40(1) below; and

(b) "land" means land in England or Wales;

and subsections (7) to (10) above shall be construed as one with the [1925 c. 21.] Land Registration Act 1925.

38 Restrictions on mortgaging

(1) Subject to subsection (2) below, no mortgage of land held by or in trust for a charity shall be granted without an order of the court or of the Commissioners.

(2) Subsection (1) above shall not apply to a mortgage of any such land by way of security for the repayment of a loan where the charity trustees have, before executing the mortgage, obtained and considered proper advice, given to them in writing, on the matters mentioned in subsection (3) below.

(3) Those matters are--

(a) whether the proposed loan is necessary in order for the charity trustees to be able to pursue the particular course of action in connection with which the loan is sought by them;

(b) whether the terms of the proposed loan are reasonable having regard to the status of the charity as a prospective borrower; and

(4) For the purposes of subsection (2) above proper advice is the advice of a person--

(a) who is reasonably believed by the charity trustees to be qualified by his ability in and practical experience of financial matters; and

(b) who has no financial interest in the making of the loan in question;

and such advice may constitute proper advice for those purposes notwithstanding that the person giving it does so in the course of his employment as an officer or employee of the charity or of the charity trustees.

(5) This section applies notwithstanding anything in the trusts of a charity; but nothing in this section applies to any mortgage for which general or special authority is given as mentioned in section 36(9)(a) above.

(6) In this section--

"land" means land in England or Wales;
"mortgage" includes a charge.

(7) Nothing in this section applies to an exempt charity.

39 Supplementary provisions relating to mortgaging

(1) Any mortgage of land held by or in trust for a charity shall state--

(a) that the land is held by or in trust for a charity,

(b) whether the charity is an exempt charity and whether the mortgage is one falling within subsection (5) of section 38 above, and

(c) if it is not an exempt charity and the mortgage is not one falling within that subsection, that the mortgage is one to which the restrictions imposed by that section apply;

and where the mortgage will be a registered disposition any such statement shall be in such form as may be prescribed.

(2) Where subsection (1) or (2) of section 38 above applies to any mortgage of land held by or in trust for a charity, the charity trustees shall certify in the mortgage--

(a) (where subsection (1) of that section applies) that the mortgage has been sanctioned by an order of the court or of the Commissioners (as the case may be), or

(b) (where subsection (2) of that section applies) that the charity trustees have power under the trusts of the charity to grant the mortgage, and that they have obtained and considered such advice as is mentioned in that subsection.

(3) Where subsection (2) above has been complied with in relation to any mortgage, then in favour of a person who (whether under the mortgage or afterwards) acquires an interest in the land in question for money or money's worth, it shall be conclusively presumed that the facts were as stated in the certificate.

(4) Where--

(a) subsection (1) or (2) of section 38 above 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) the mortgage has been sanctioned by an order of the court or of the Commissioners, or

(ii) 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 subsection (2) of that section.

(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.

40 Release of charity rentcharges

(1) Section 36(1) above 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 36(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.

Part VI Charity Accounts, Reports and Returns

41 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 42(1) below, 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) above 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.

42 Annual statements of accounts

(1) The charity trustees of a charity shall (subject to subsection (3) below) 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) above, 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 Act 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) above.

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

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

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

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 41 above 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.

43 Annual audit or examination of charity accounts

(1) Subsection (2) below 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 44 below and is under the rules of that body eligible for appointment as auditor of the charity.

(3) If subsection (2) above does not apply to a financial year of a charity, then (subject to subsection (4) below) 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) above.

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