Charities Act 2011

• (3) While a person is disqualified by virtue of an order under this section in relation to a charity, the person is also disqualified, subject to subsection (5), from holding an office or employment in the charity with senior management functions.

• (4) A function of an office or employment held by a person (“A”) is a senior management function if—

• (a) it relates to the management of the charity, and A is not responsible for it to another officer or employee (other than a charity trustee or trustee for the charity), or

• (b) it involves control over money and the only officer or employee (other than a charity trustee or trustee for the charity) to whom A is responsible for it is a person with senior management functions other than ones involving control over money.

• (5) An order under this section may provide for subsection (3) not to apply—

• (a) generally, or

• (b) in relation to a particular office or employment or to any office or employment of a particular description.

• (6) The Commission may make an order disqualifying a person under this section only if it is satisfied that—

• (a) one or more of the conditions listed in subsection (7) are met in relation to the person,

• (b) the person is unfit to be a charity trustee or trustee for a charity (either generally or in relation to the charities or classes of charity specified or described in the order), and

• (c) making the order is desirable in the public interest in order to protect public trust and confidence in charities generally or in the charities or classes of charity specified or described in the order.

• (7) These are the conditions—

A	that the person has been cautioned for a disqualifying offence against a charity or involving the administration of a charity.
B	that—under the law of a country or territory outside the United Kingdom the person has been convicted in respect of an offence against a charity or involving the administration of a charity, andthe act which constituted the offence would have constituted a disqualifying offence if it had been done in any part of the United Kingdom.
C	that the person has been found by Her Majesty's Revenue and Customs not to be a fit and proper person to be a manager of a body or trust, for the purposes of paragraph 4 of Schedule 6 to the Finance Act 2010 (definition of charity for tax purposes), and the finding has not been overturned.
D	that the person was a trustee, charity trustee, officer, agent or employee of a charity at a time when there was misconduct or mismanagement in the administration of the charity, and—the person was responsible for the misconduct or mismanagement,the person knew of the misconduct or mismanagement and failed to take any reasonable step to oppose it, orthe person's conduct contributed to or facilitated the misconduct or mismanagement.
E	that the person was an officer or employee of a body corporate at a time when the body was a trustee or charity trustee for a charity and when there was misconduct or mismanagement by it in the administration of the charity, and—the person was responsible for the misconduct or mismanagement,the person knew of the misconduct or mismanagement and failed to take any reasonable step to oppose it, orthe person's conduct contributed to or facilitated the misconduct or mismanagement.
F	that any other past or continuing conduct by the person, whether or not in relation to a charity, is damaging or likely to be damaging to public trust and confidence in charities generally or in the charities or classes of charity specified or described in the order.

• (8) The Secretary of State may amend this section by regulations to add or remove a condition.

• (9) In this section “ disqualifying offence ” means an offence within Case A in section 178(1).

• (10) Conditions A and B apply whether the caution or conviction occurred before or after the commencement of this section.

• (11) Condition B does not apply in relation to a conviction which is spent under the law of the country or territory concerned.

• (12) For the purposes of condition B—

• (a) an act punishable under the law of a country or territory outside the United Kingdom constitutes an offence under that law, however it is described in that law, and

• (b) “ charity ” means an institution that is a charity under the law of any part of the United Kingdom or that is established under the law of another country or territory principally for charitable, benevolent or philanthropic purposes.

Disqualification orders: procedure

181B

• (1) An order under section 181A must specify the period for which the person is disqualified.

• (2) The period—

• (a) must be not more than 15 years beginning with the day on which the order takes effect, and

• (b) must be proportionate, having regard in particular to the time when a conviction becomes spent or, where condition B applies, would become spent if it were a conviction for the relevant disqualifying offence, and to circumstances in which the Commission may or must grant a waiver under section 181 where a person is disqualified under section 178.

• (3) An order takes effect—

• (a) at the end of the time specified by Tribunal Procedure Rules for starting proceedings for an appeal against the order, if no proceedings are started within that time, or

• (b) (subject to the decision on the appeal) when any proceedings started within that time are withdrawn or finally determined.

• (4) The Commission may by order suspend a person from being a charity trustee or trustee for a charity if it has given notice under section 181C(1)(a) of its proposal to make an order under section 181A in respect of the person.

• (5) The Commission may not make an order under subsection (4) so as to suspend a person for a period of more than 12 months, but at any time before the expiry of an order the Commission may extend or further extend the suspension by a further order under that subsection, provided that—

• (a) the order does not extend the suspension for a period of more than 12 months, and

• (b) the total period of suspension is not more than 2 years.

• (6) An order under subsection (4) ceases to have effect—

• (a) if the Commission notifies the person that it will not proceed with its proposal, on the notification being given;

• (b) if the Commission makes the order under section 181A, on the order taking effect;

or, if earlier, at the end of the period specified in accordance with subsection (5).

• (7) The Commission must review any order under subsection (4), at such intervals as it thinks fit.

• (8) If on a review it appears to the Commission that it would be appropriate to discharge an order under subsection (4) in whole or in part, the Commission must do so (whether subject to any savings or other transitional provisions or not).

• (9) An order under subsection (4) made in the case of any person (“P”) may make provision, as respects the period of P's suspension, for matters arising out of it, and in particular—

• (a) for enabling any person to execute any instrument in P's name or otherwise act for P, and

• (b) in the case of a charity trustee, for adjusting any rules governing the proceedings of the charity trustees to take account of the reduction in the number capable of acting.

This does not affect the generality of section 337(1) and (2).

• (10) While an order under subsection (4) is in force suspending a person from being a charity trustee or trustee for a charity, the person must not take up any appointment as a charity trustee or trustee for any other charity without the written approval of the Commission.

181C

• (1) Before making an order in respect of a person under section 181A without the person's consent the Commission must—

• (a) give the person not less than one month's notice of its proposals, and

• (b) invite representations to be made to it within a period specified in the notice.

• (2) Before making an order under section 181A in respect of a person who the Commission knows or believes to be a charity trustee or trustee for a charity, the Commission must also—

• (a) give notice of its proposals to each of the charity trustees of the charity in question;

• (b) comply with the publicity requirement, unless the Commission is satisfied that for any reason compliance with the requirement is unnecessary.

• (3) The publicity requirement is that the Commission must give public notice of its proposals, inviting representations to be made to it within a period specified in the notice.

• (4) The time when any such notice is given is to be decided by the Commission.

• (5) Any notice of any proposals which is to be given under this section is to contain such particulars of the proposals, or such directions for obtaining information about them, as the Commission thinks sufficient and appropriate.

• (6) Where the Commission gives notice of any proposals under this section—

• (a) it must take into account any representations made to it within the period specified in the notice, and

• (b) it may (without further notice) proceed with the proposals either without modifications or with such modifications as it thinks desirable;

but a notice under subsection (2)(a) need not specify a period for the purposes of paragraph (a) if the charity came to the Commission's knowledge or belief after the expiry of the period specified for the purposes of subsection (1)(b).

• (7) A notice under subsection (1) or (2)(a)—

• (a) may be given by post, and

• (b) if given by post, may be addressed to the recipient's last known address in the United Kingdom.

• (8) A notice under subsection (2)(b) is to be given in such manner as the Commission thinks sufficient and appropriate.

• (9) Where the Commission makes an order under section 181A in respect of a person it knows or believes to be a charity trustee or trustee for a charity it must (as well as serving it on that person) send a copy of the order and a statement of the Commission's reasons for making it—

• (a) to the charity in question (if a body corporate), or

• (b) (if not) to each of the charity trustees of the charity in question.

• (10) Nothing in this section requires the Commission to give notice, or send a document, to a person who cannot be found or has no known address in the United Kingdom.

• (11) Any documents required to be sent to a person under this section may be sent to, or otherwise served on, the person in the same way as an order made by the Commission under this Act could be served on the person in accordance with section 339.

181D

A person in respect of whom an order under section 181A is in force may at any time apply to the Commission for an order varying or discharging that order.

PART 14A — SOCIAL INVESTMENTS

292A

• (1) This section applies for the purposes of this Part.

• (2) A social investment is made when a relevant act of a charity is carried out with a view to both—

• (a) directly furthering the charity's purposes; and

• (b) achieving a financial return for the charity.

• (3) References to an act of a charity are, in the case of an unincorporated charity, to an act of the charity trustees.

• (4) A relevant act of a charity is—

• (a) an application or use of funds or other property; or

• (b) taking on a commitment in relation to a liability of another person (such as a guarantee) that puts the charity's funds or other property at risk of being applied or used.

• (5) An act mentioned in subsection (4)(a) is to be regarded as achieving a financial return if its outcome is better for the charity in financial terms than expending the whole of the funds or other property in question.

• (6) A commitment mentioned in subsection (4)(b) is to be regarded as achieving a financial return if—

• (a) it is not called upon; or

• (b) it is called upon without resulting in the expenditure of the whole of the funds or other property put at risk.

• (7) The fact that a relevant act may also have results other than those mentioned in subsection (2)(a) and (b) does not prevent the carrying out of that act being regarded as the making of a social investment.

• (8) The fact that carrying out a relevant act of a charity is regarded as the making of a social investment for the purposes of this Part does not of itself make the act an investment for any other purpose.

292B

• (1) An incorporated charity has, and the charity trustees of an unincorporated charity have, power to make social investments.

• (2) The power conferred by this section may not be used to make a social investment involving—

• (a) the application or use of permanent endowment, or

• (b) taking on a commitment mentioned in section 292A(4)(b) that puts permanent endowment at risk of being applied or used,

unless the charity trustees expect that making the social investment will not contravene any restriction with respect to expenditure that applies to the permanent endowment in question (but see section 104AA, which confers on charity trustees a power to use permanent endowment to make social investments in certain circumstances).

• (3) The power conferred by this section—

• (a) may be restricted or excluded by the trusts of the charity;

• (b) is (subject to paragraph (a)) in addition to any other power to make social investments that the charity or charity trustees may have.

• (4) This section and section 292C do not apply in relation to—

• (a) charities established by, or whose purposes and functions are set out in, legislation;

• (b) charities established or regulated by Royal charter;

but they apply in relation to all other charities, whether established before or after this section comes into force.

• (5) In subsection (4) “legislation” means—

• (a) an Act of Parliament or an Act or Measure of the National Assembly for Wales; or

• (b) subordinate legislation (within the meaning of the Interpretation Act 1978) made under such an Act or Measure.

292C

• (1) This section applies in relation to social investments that are made after section 292B comes into force, whether or not made by the exercise of the power conferred by section 292B.

• (2) The charity trustees of a charity must, before exercising a power to make a social investment—

• (a) consider whether in all the circumstances any advice about the proposed social investment ought to be obtained;

• (b) obtain and consider any advice they conclude ought to be obtained; and

• (c) satisfy themselves that it is in the interests of the charity to make the social investment, having regard to the benefit they expect it to achieve for the charity (by directly furthering the charity's purposes and achieving a financial return).

• (3) The charity trustees of a charity must from time to time review the charity's social investments.

• (4) When carrying out a review the charity trustees must—

• (a) consider whether any advice about the social investments (or any particular social investment) ought to be obtained; and

• (b) obtain and consider any advice they conclude ought to be obtained.

• (5) The duties under this section may not be restricted or excluded by the charity's trusts.

• (6) In the case of an unincorporated charity, the duties under this section apply in relation to relevant social investments in place of any duties under sections 4 and 5 of the Trustee Act 2000 that would otherwise apply.

• (7) In subsection (6) “relevant social investments” means social investments that are investments for the purposes of Part 2 of the Trustee Act 2000.

The persons are—

Power to quash the decision and (if appropriate)—

Power to quash the decision and (if appropriate)—

Power to quash the decision and (if appropriate)—

Power to—

Power to—

Power to—

Decision of the Commission—

Disqualification: pre-commencement events etc.

Civil consequences of acting while disqualified

Decision of the Commission under section 30 or 34—

Power to quash the decision and (if appropriate)—

Power to quash the decision and (if appropriate)—

Power to quash the decision and (if appropriate)—

The persons are—

The persons are—

Power to—

Power to—

Disqualification orders

178A

• (1) The following offences are specified for the purposes of Case A—

1	An offence to which Part 4 of the Counter-Terrorism Act 2008 applies (see sections 41 to 43 of that Act).
2	An offence under section 13 or 19 of the Terrorism Act 2000 (wearing of uniform etc, and failure to disclose information).
3	A money laundering offence within the meaning of section 415 of the Proceeds of Crime Act 2002.
4	An offence under any of the following provisions of the Bribery Act 2010—section 1 (bribing another person),section 2 (offences relating to being bribed),section 6 (bribery of foreign public officials),section 7 (failure of commercial organisations to prevent bribery).
5	An offence under section 77 of this Act.
6	An offence of—misconduct in public office,perjury,perverting the course of justice.

• (2) An offence which has been superseded (directly or indirectly) by an offence specified in subsection (1) is also specified for the purposes of Case A.

• (3) In relation to an offence specified in subsection (1) or (2), the following offences are also specified for the purposes of Case A—

• (a) an offence of attempt, conspiracy or incitement to commit the offence;

• (b) an offence of aiding, abetting, counselling or procuring the commission of the offence;

• (c) an offence under Part 2 of the Serious Crime Act 2007 (encouraging or assisting) in relation to the offence.

• (4) The Secretary of State may amend this section by regulations to add or remove an offence.

Disqualification orders

Civil consequences of acting while disqualified

Connected person: child, spouse and civil partner

Orders subject to affirmative procedure etc.

184A

• (1) For the purposes of sections 183 and 184, a person who is not a charity trustee or trustee for a charity is treated as acting as one if that person—

• (a) is an officer of a body corporate which is a charity trustee or trustee for a charity, and

• (b) takes part in that capacity in any decision relating to the administration of the charity.

• (2) In subsection (1) “officer” includes any of the persons having general control and management of the administration of the body.

Orders subject to affirmative procedure etc.

11A

• (1) A relevant higher education provider not otherwise listed in paragraphs 2 to 11 if Her Majesty declares it by Order in Council to be an exempt charity for the purposes of this Act.

• (2) Sub-paragraph (1) does not include—

• (a) any college in the university of Oxford;

• (b) any college or hall in the university of Cambridge or Durham; or

• (c) any students’ union.

11B

In paragraphs 2 to 11A—

• “higher education corporation” has the meaning given by section 90(1) of the Further and Higher Education Act 1992;

• “relevant higher education provider” means an institution which is registered in the register of higher education providers established and maintained by the Office for Students pursuant to the Higher Education and Research Act 2017 (“the 2017 Act”) and—which is funded wholly or partly by a grant, loan or other payment from the Office for Students under section 39 or 40 of the 2017 Act,which is not so funded but is eligible to receive such funding under section 39 or 40 of the 2017 Act, orwhich provides higher education courses which are designated for the purposes of section 22 of the Teaching and Higher Education Act 1998 by or under regulations made under that section.

Decision of the Commission under section 30 or 34—

The persons are—

Power to quash the decision and (if appropriate)—

The persons are—

The persons are—

Power to—

247A

• (1) The Welsh Ministers may by regulations made by statutory instrument provide for Part A1 of the Insolvency Act 1986 to apply (with such modifications as may be specified in the regulations) in relation to a CIO that is a registered social landlord.

• (2) The regulations may make provision in connection with the interaction between Part A1 of the Insolvency Act 1986 as applied by the regulations and any other insolvency procedure in relation to a CIO that is a registered social landlord.

• (3) The regulations may make—

• (a) different provision for different purposes, and

• (b) such supplemental, incidental, consequential, transitory or transitional provision or savings as the Welsh Ministers consider appropriate.

• (4) The power to make regulations under this section includes power to amend, disapply, or modify (in ways specified in the regulations) any provision made by legislation.

• (5) A statutory instrument containing the regulations may not be made unless a draft of the statutory instrument containing them has been laid before and approved by a resolution of Senedd Cymru.

• (6) Before making any regulations under this section the Welsh Ministers must consult such persons or bodies of persons as the Welsh Ministers consider appropriate.

• (7) In this section—

• “insolvency procedure” includes the provision made by sections 39 to 50 of the Housing Act 1996;

• “legislation” means—an Act of Parliament or an Act or Measure of Senedd Cymru; orsubordinate legislation (within the meaning of the Interpretation Act 1978) made under such an Act or Measure;

• “registered social landlord” means registered as a social landlord under Part 1 of the Housing Act 1996.

Duration of disqualification, and suspension pending disqualification

Remuneration of charity trustees or trustees etc. providing goods or services to charity

Connected person: child, spouse and civil partner

Decision of the Commission under section 30 or 34—

The persons are—

Power to quash the decision and (if appropriate)—

The persons are—

The persons are—

Power to—

67A

• (1) Subsection (2) applies if—

• (a) money or other property is solicited to enable a charity to further specific charitable purposes,

• (b) money or other property is given as a result of that solicitation, and

• (c) some or all of that money or other property (or the property for the time being representing it or derived from it) is applicable cy-près by virtue of section 62(1)(a) or (b) or 63A.

• (2) The charity trustees of the charity may resolve that all the money or other property which is applicable cy-près by virtue of section 62(1)(a) or (b) or 63A be applied for such charitable purposes specified in the resolution as they consider appropriate, having regard to—

• (a) the desirability of securing that the purposes are, so far as reasonably practicable, similar to the specific charitable purposes for which the money or other property was given;

• (b) the need for the purposes to be suitable and effective in the light of current social and economic circumstances.

• (3) A resolution under this section must be passed by a majority of the charity trustees.

• (4) If a resolution passed under this section concerns money or other property with a value exceeding £1,000—

• (a) the charity trustees must send a copy of the resolution to the Commission, together with a statement of their reasons for passing it, and

• (b) the resolution does not have effect until the date on which the Commission consents to it in writing.

• (5) The Secretary of State may by regulations amend subsection (4) by substituting a different sum for the sum for the time being specified there.

Power of the court and the Commission to make schemes

75ZA

• (1) Any power of the court or the Commission to make a scheme in relation to a charity that is a charitable trust is also exercisable in relation to any other institution which is a charity.

• (2) Subsection (1)—

• (a) is subject to the provisions of this Act;

• (b) is to be treated as always having had effect.

Disqualification orders

Disqualification orders: procedure

Remuneration of charity trustees or trustees etc. providing goods or services to charity

Charity established etc by Royal charter: general power to amend

280C

• (1) This section applies to any charity which is established or regulated by Royal charter.

• (2) The charity trustees of such a charity may resolve that the Royal charter should be amended in such manner as is specified in the resolution if—

• (a) they are satisfied that it is expedient in the interests of the charity to do so, and

• (b) there is no power under the Royal charter to make the proposed amendment.

• (3) Subsection (4) applies in the case of a charity which has a body of members distinct from the charity trustees, any of whom are entitled under the Royal charter to attend and vote at a general meeting of the body.

• (4) In the case of a charity to which this subsection applies, a resolution under subsection (2) may not be approved under subsection (6) unless—

• (a) it is passed by a majority of the charity trustees of the charity, and

• (b) it is approved by a further resolution which is passed—

• (i) at a general meeting, by not less than 75% of the members entitled to attend and vote at the meeting who vote on the resolution,

• (ii) at a general meeting, by a decision taken without a vote and without any expression of dissent in response to the question put to the meeting, or

• (iii) otherwise than at a general meeting, by the agreement of all the members entitled to attend and vote at a general meeting.

• (5) In the case of any other charity to which this section applies, a resolution under subsection (2) may not be approved under subsection (6) unless it is passed by not less than 75% of the charity trustees of the charity.

• (6) A resolution under this section takes effect when it is approved by Her Majesty by Order in Council.

324A

• (1) The Tribunal may make an authorised costs order on the application of a charity or charity trustees of a charity.

• (2) An authorised costs order is an order—

• (a) made in respect of proceedings brought, or proposed to be brought, before the Tribunal or on appeal from it, and

• (b) authorising payment out of the funds of the charity of costs falling within subsection (3).

• (3) Those costs are costs incurred, or to be incurred, in connection with the proceedings—

• (a) by the charity,

• (b) by its charity trustees, or

• (c) by any other person, so far as the charity or its charity trustees are ordered by the Tribunal or the court hearing the appeal to bear them.

Trustee of charitable trust: status as trust corporation

334A

• (1) For the purposes of the provisions listed in subsection (2), “trust corporation”, in relation to a charitable trust, includes a trustee of or for the charitable trust if that trustee is a body corporate and itself a charity.

• (2) The provisions are—

• (a) section 117(1)(xxx) of the Settled Land Act 1925,

• (b) paragraph (18) of section 68(1) of the Trustee Act 1925,

• (c) section 205(1)(xxviii) of the Law of Property Act 1925,

• (d) section 55(1)(xxvi) of the Administration of Estates Act 1925, and

• (e) section 128 of the Senior Courts Act 1981.

The persons are—

Power to quash the decision and (if appropriate)—

Power to—

Power to quash the decision and (if appropriate)—

Power to—

Power to—

The persons are—

Decision of the Commission—

45A

• (1) The Commission may delay the registration of a charity if the Commission has given a direction under section 42 (“the section 42 direction”) requiring the name of the charity to be changed.

• (2) A delay under subsection (1) may last until the first to occur of—

• (a) the charity trustees notifying the Commission of the charity’s new name and the date of the name change, or

• (b) the expiry of the maximum postponement period.

• (3) The “maximum postponement period” is the period of 60 days beginning at the end of the period specified in the section 42 direction for giving effect to the direction.

• (4) If any relevant proceedings are commenced, any day on which the relevant proceedings are ongoing is to be disregarded for the purposes of determining whether the period of 60 days mentioned in subsection (3) has elapsed.

• (5) Each of the following are “relevant proceedings”—

• (a) proceedings on an appeal brought to the Tribunal under section 319 against the section 42 direction or against any steps taken by the Commission with a view to securing compliance with the section 42 direction;

• (b) proceedings on an application made to the Tribunal under section 321 for the review of the Commission’s decision to institute an inquiry under section 46 in respect of matters connected with the section 42 direction;

• (c) proceedings on an application for judicial review of the Commission’s decision to give the section 42 direction or to take any steps with a view to securing compliance with the section 42 direction;

• (d) proceedings on an application under section 336 in respect of disobedience to the section 42 direction.

• (6) Relevant proceedings are commenced when a notice, claim form or other document is sent or delivered to, or filed with, the Tribunal or court for the purpose of commencing the proceedings.

• (7) Relevant proceedings are ongoing until—

• (a) the proceedings (including any proceedings on appeal or further appeal) have been concluded, and

• (b) any period during which an appeal (or further appeal) may ordinarily be made has passed.

45B

• (1) If the charity trustees of a charity notify the Commission under section 35(3) of a change of name of the charity, the Commission may delay changing the charity’s name in the register if the Commission has given a direction under section 42 (“the section 42 direction”) requiring the new name to be changed.

• (2) A delay under subsection (1) may last until the first to occur of—

• (a) the charity trustees notifying the Commission of the charity’s further new name and the date of the further name change, or

• (b) the expiry of the maximum postponement period.

• (3) The “maximum postponement period” is the period of 60 days beginning at the end of the period specified in the section 42 direction for giving effect to the direction.

• (4) If any relevant proceedings are commenced, any day on which the relevant proceedings are ongoing is to be disregarded for the purposes of determining whether the period of 60 days mentioned in subsection (3) has elapsed.

• (5) Each of the following are “relevant proceedings”—

• (a) proceedings on an appeal brought to the Tribunal under section 319 against the section 42 direction or against any steps taken by the Commission with a view to securing compliance with the section 42 direction;

• (b) proceedings on an application made to the Tribunal under section 321 for the review of the Commission’s decision to institute an inquiry under section 46 in respect of matters connected with the section 42 direction;

• (c) proceedings on an application for judicial review of the Commission’s decision to give the section 42 direction or to take any steps with a view to securing compliance with the section 42 direction;

• (d) proceedings on an application under section 336 in respect of disobedience to the section 42 direction.

• (6) Relevant proceedings are commenced when a notice, claim form or other document is sent or delivered to, or filed with, the Tribunal or court for the purpose of commencing the proceedings.

• (7) Relevant proceedings are ongoing until—

• (a) the proceedings (including any proceedings on appeal or further appeal) have been concluded, and

• (b) any period during which an appeal (or further appeal) may ordinarily be made has passed.

104AA

• (1) This section applies to a fund, or a portion of a fund, in respect of which a resolution under section 104A(2) has effect.

• (2) The charity trustees may resolve that—

• (a) the fund or portion, and

• (b) any returns from the investment of the fund or portion,

may be used to make social investments (within the meaning of section 292A) which they could not otherwise make.

• (3) While a resolution under subsection (2) has effect, regulations under section 104B(1)(b) and (ba) apply to—

• (a) the fund or portion, and

• (b) any returns from the investment of the fund or portion.

Advice etc from charity trustees, officers and employees

128A

• (1) Subsection (2) applies to—

• (a) a report by a designated adviser for the purposes of section 119(1)(a),

• (b) advice on a proposed disposition for the purposes of section 120(2)(a),

• (c) proper advice in connection with a mortgage of land for the purposes of section 124(2), and

• (d) proper advice in connection with a mortgage of land for the purposes of section 124(7).

• (2) For the purposes of the provisions mentioned in subsection (1), it does not matter if the report or the advice (as the case may be) is provided—

• (a) by a charity trustee or an officer or employee of the charity or of the charity trustees, or

• (b) in the course of a person’s employment as an officer or an employee of the charity or of the charity trustees.

Disqualification: pre-commencement events etc.

Disqualification orders: procedure

Invalid appointment of charity trustee

Power to confirm trustee appointments etc

184B

• (1) Subsection (2) applies if—

• (a) a person acts, or intends to act, as a charity trustee in relation to a charity, but

• (b) there is not, or might not be, a valid appointment or election of that person to a qualifying position in relation to that charity.

• (2) The Commission may, with the consent of the person concerned, by order provide that for the purposes of anything done (or not done) on or after the date of the order—

• (a) any defect in the person’s appointment or election to a qualifying position (including any absence of appointment or election) is to be ignored in relation to the charity, and

• (b) so far as is necessary for those purposes, a valid appointment or election to that qualifying position is to be treated as having been made in respect of the person.

• (3) For the purposes of this section a position is a “qualifying position” in relation to a charity if, as a result of a person holding that position, the person is a charity trustee of the charity.

• (4) The fact that a position is not a position in a charity does not prevent it from being a qualifying position in relation to the charity.

• (5) An order under subsection (2) may include—

• (a) provision with respect to the vesting in or transfer of property that the Commission could make on the removal or appointment of a charity trustee by it under section 69 (Commission’s concurrent jurisdiction with High Court for certain purposes);

• (b) provision that an act of a person who is the subject of the order is valid notwithstanding that there was not at the time the act was carried out a valid appointment or election to a qualifying position in respect of that person.

• (6) An order containing provision made by virtue of subsection (5)(a) has the same effect as an order made under section 69.

186A

• (1) This section applies to a person who—

• (a) has carried out work for or on behalf of a charity, and

• (b) is a charity trustee or trustee for the charity (or was one when the work was carried out).

• (2) If the condition in subsection (3) is met, the Commission may by order—

• (a) require the charity trustees of the charity to pay the person such remuneration for the work as must be specified in the order;

• (b) authorise, to such extent as must be specified in the order, any benefit already received in connection with the work to be retained.

• (3) The condition in this subsection is that the Commission considers that it would be inequitable for the person not to be paid the remuneration or not to retain the benefit.

• (4) In determining whether to make an order under this section, the Commission must in particular have regard to—

• (a) whether, if the person had not carried out the work, the charity would have paid someone else to carry it out,

• (b) the level of skill with which the work was carried out,

• (c) any express provision in the trusts of the charity prohibiting the person from receiving the remuneration or retaining the benefit, and

• (d) whether remunerating the person or allowing the person to retain the benefit would encourage breaches of trust or breaches of duty by persons in their capacity as charity trustees or trustees for charities.

Unincorporated charity’s general power to amend

Amendment of the trusts of an unincorporated charity

280A

• (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, if they are satisfied that it is expedient in the interests of the charity, resolve that the trusts of the charity should be amended in such manner as is specified in the resolution.

• (3) The power under subsection (2) is not exercisable in any way which would result in the institution ceasing to be a charity.

• (4) Subsection (5) applies in the case of a charity which has a body of members distinct from the charity trustees, any of whom are entitled under the trusts of the charity to attend and vote at a general meeting of the body.

• (5) In the case of a charity to which this subsection applies, a resolution under subsection (2) is effective only if—

• (a) it is passed by a majority of the charity trustees of the charity, and

• (b) it is approved by a further resolution which is passed—

• (i) at a general meeting, by not less than 75% of the members entitled to attend and vote at the meeting who vote on the resolution,

• (ii) at a general meeting, by a decision taken without a vote and without any expression of dissent in response to the question put to the meeting, or

• (iii) otherwise than at a general meeting, by the agreement of all the members entitled to attend and vote at a general meeting.

• (6) In the case of a charity other than one to which subsection (5) applies, a resolution under subsection (2) is effective only if it is passed by not less than 75% of the charity trustees of the charity.

• (7) An amendment to which subsection (8) applies—

• (a) requires the written consent of the Commission, and

• (b) is ineffective if such consent has not been obtained.

• (8) This subsection applies to an amendment—

• (a) which would alter the purposes of the charity;

• (b) which would alter a provision directing the application of property of the charity on its dissolution;

• (c) which would provide authorisation for any benefit to be obtained by charity trustees or members of the charity, or persons connected with them;

• (d) which would alter a restriction making property permanent endowment;

• (e) which would require the consent of a person other than—

• (i) a charity trustee of, or trustee for, the charity, or

• (ii) a member of the charity,

if made otherwise than by virtue of this section;

• (f) which would affect any right directly conferred by the trusts of the charity on a person who—

• (i) is named in the trusts of the charity, or

• (ii) holds an office or other position specified in the trusts of the charity (other than that of charity trustee or member of, or trustee for, the charity); or

• (g) which would confer power on any person or persons to make an amendment falling within any of paragraphs (a) to (f).

• (9) But paragraphs (e) and (f) of subsection (8) do not apply where the person concerned consents to the amendment or is no longer in existence.

• (10) In considering whether to consent to an alteration falling within subsection (8)(a), or to the conferral of a power which would enable a person or persons to make such an alteration, the Commission must have regard to—

• (a) the purposes of the charity when it was established, if and so far as they are reasonably ascertainable,

• (b) the desirability of securing that the purposes of the charity are, so far as reasonably practicable, similar to the purposes being altered, and

• (c) the need for the charity to have purposes which are suitable and effective in the light of current social and economic circumstances.

280B

• (1) A resolution under section 280A(2) takes effect on the latest of—

• (a) the date the resolution is passed,

• (b) the date specified in the resolution for it to take effect,

• (c) if relevant, the date on which the resolution required by virtue of section 280A(5)(b) is passed, and

• (d) if relevant, the date on which the Commission gives any consent required by virtue of section 280A(7).

• (2) For the purposes of section 280A(8)(c) “benefit” means a direct or indirect benefit of any nature, except that it does not include—

• (a) any remuneration whose receipt may be authorised under section 185, or

• (b) the purchase of any insurance which may be authorised under section 189.

• (3) For the purposes of section 280A(8)(c) the following persons are connected with a charity trustee or a member of a charity—

• (a) a child, parent, grandchild, grandparent, brother or sister of the trustee or member;

• (b) the spouse or civil partner of the trustee or member or of any person falling within paragraph (a);

• (c) a person carrying on business in partnership with the trustee or member or with any person falling within paragraph (a) or (b);

• (d) an institution which is controlled—

• (i) by the trustee or member or by any person falling within paragraph (a), (b) or (c), or

• (ii) by two or more persons falling within sub-paragraph (i), when taken together;

• (e) a body corporate in which—

• (i) the trustee or member or any connected person falling within any of paragraphs (a) to (c) has a substantial interest, or

• (ii) two or more persons falling within sub-paragraph (i), when taken together, have a substantial interest.

• (4) Sections 350 to 352 (meaning of child, spouse, civil partner, controlled institution and substantial interest) apply for the purposes of subsection (3).

Power to borrow from permanent endowment

Power to borrow from permanent endowment: general

284A

• (1) This section applies to any available endowment fund of a charity.

• (2) The charity trustees may resolve to borrow an amount, not exceeding the permitted amount, from the available endowment fund if they are satisfied—

• (a) that it is expedient for the amount to be borrowed, in the light of the purposes set out in the trusts to which the fund is subject and the purposes of the charity, and

• (b) that arrangements are in place for the amount to be repaid within 20 years of being borrowed.

• (3) Any amount borrowed in accordance with subsection (2) no longer forms part of the available endowment fund and, as a result, is freed from the restrictions with respect to the expenditure of capital that applied to it when it was comprised in that fund.

• (4) An amount borrowed in accordance with subsection (2) may not be used to repay (in whole or in part) any amount previously borrowed from permanent endowment (whether the previous borrowing was by virtue of this section or otherwise).

• (5) When repaying an amount borrowed (whether in whole or in part), the charity trustees may resolve to pay an additional amount not exceeding the maximum estimated capital appreciation.

• (6) Any—

• (a) repayment of an amount borrowed, and

• (b) payment of an additional amount by virtue of a resolution under subsection (5),

is to be added to the available endowment fund and is to be subject to the same restrictions as to expenditure as apply to the other capital in the fund.

• (7) The powers conferred by this section—

• (a) may be restricted or excluded by the trusts of the charity;

• (b) are (subject to paragraph (a)) in addition to any other power to borrow that the charity or charity trustees may have.

• (8) If, and in so far as, the power conferred by subsection (5) confers power to accumulate income, it is not subject to section 14(3) of the Perpetuities and Accumulations Act 2009 (which provides for certain powers to accumulate income to cease after 21 years).

• (9) 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.

• (10) If a resolution under section 104A(2) has effect in respect of an available endowment fund (or portion of such a fund), references in this section to an “available endowment fund” include that fund (or portion) but do not include any returns from the investment of the fund (or portion) which have not been accumulated.

• (11) For the meaning of “permitted amount” and “maximum estimated capital appreciation” see sections 284B and 284C respectively.

Calculation of the “permitted amount”

284B

• (1) The “permitted amount” for the purposes of section 284A(2) is given by the formula—

$$(0.25×(V+B))-B$where—V is the value of the available endowment fund on the relevant date (ignoring the value, if any, of the benefit of the debt owed by the charity trustees representing outstanding borrowing from the fund), andB is the amount of the charity trustees’ outstanding borrowing from the available endowment fund on that date.$

• (2) In subsection (1)—

• “outstanding borrowing” means outstanding borrowing by virtue of section 284A or otherwise;

• the “relevant date” is the date on which the trustees resolve to borrow from the available endowment fund (see section 284A(2)).

• (3) If a resolution under section 104A(2) has effect in respect of the available endowment fund (or any part of it), for the purposes of subsection (1) the value of the available endowment fund does not include any returns from the investment of the fund (or part) which have not been accumulated.

Calculation of the “maximum estimated capital appreciation”

284C

• (1) The “maximum estimated capital appreciation” for the purposes of section 284A(5) is given by the formula—

$$R×I$where—R is the amount of borrowing being repaid, andI is the percentage increase in the relevant index between the month in which the amount was borrowed and the month preceding the month in which the repayment is made (or if there is no increase is nil).$

• (2) The “relevant index” is whichever of the following is selected by the charity trustees from time to time—

• (a) the retail prices index;

• (b) the consumer prices index;

• (c) any similar general index of prices published by the Statistics Board.

• (3) In this section—

• “consumer prices index” means the general index for consumer prices published by the Statistics Board;

• “retail prices index” means the general index of retail prices (for all items) published by the Statistics Board.

284D

• (1) If (at any time) it appears to the charity trustees that—

• (a) they will not be able to fulfil the arrangements put in place to repay an amount borrowed under section 284A, or

• (b) those arrangements are not sufficient to ensure that the amount is repaid,

the trustees must apply to the Commission for an order under this section directing them how to proceed.

• (2) An order under this section may give such directions as the Commission thinks fit, including—

• (a) that the relevant amount may be repaid over a longer period,

• (b) that the charity trustees put in place arrangements specified in the order, or

• (c) that the charity trustees need not repay an amount borrowed.

352A

The Secretary of State may by regulations amend this Act to alter what is a “connected person” for the purposes of any provision of this Act.

The persons are—

Power to—

Power to quash the decision and (if appropriate)—

Power to—

Power to—

Power to—

The persons are—

Decision of the Commission—

Limited power to make ex gratia payments

331A

• (1) The charity trustees of a charity may take any action falling within subsection (2)(a) or (b) if the conditions in subsection (3) are met.

• (2) The actions are—

• (a) making any application of property of the charity, or

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

• (3) The conditions are—

• (a) that the value of the property does not exceed the relevant threshold,

• (b) that the charity trustees have no power to take the action apart from this section or by virtue of section 106, and

• (c) that in all the circumstances the charity trustees could reasonably be regarded as being under a moral obligation to take the action.

• (4) The power conferred by this section may be restricted or excluded by the trusts of the charity.

• (5) In relation to a charity established by (or whose purposes or functions are set out in) legislation, the power conferred by this section is not disapplied only because the legislation concerned prohibits application of property of the charity otherwise than as set out in the legislation.

• (6) For the purposes of subsection (3)(a)—

• (a) if the charity’s gross income in its last financial year did not exceed £25,000, the relevant threshold is £1,000;

• (b) if the charity’s gross income in its last financial year exceeded £25,000 but not £250,000, the relevant threshold is £2,500;

• (c) if the charity’s gross income in its last financial year exceeded £250,000 but not £1 million, the relevant threshold is £10,000;

• (d) if the charity’s gross income in its last financial year exceeded £1 million, the relevant threshold is £20,000.

• (7) In subsection (5) “legislation” means—

• (a) an Act of Parliament;

• (b) an Act or Measure of Senedd Cymru;

• (c) subordinate legislation (within the meaning of the Interpretation Act 1978) made under an Act of Parliament;

• (d) an instrument made under an Act or Measure of Senedd Cymru; or

• (e) a Measure of the Church Assembly or of the General Synod of the Church of England.

331B

The Secretary of State may by regulations amend section 331A(6) (relevant income thresholds) by substituting a different sum for any sum for the time being specified in that provision.