Legalize / United Kingdom / Public General Act

Charities Act 2011

Type Public General Act

Publication 2011-12-14

Last updated 2025-11-27

State In force

Department Statute Law Database

Source legislation.gov.uk

articles Not indexed

Reform history JSON API

(a) the Commission has been informed as mentioned in section 107(1)(a) by any relevant institution, and

(b) before any transfer is made by the institution in pursuance of a direction under section 107(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.

(2) The institution must without delay notify those circumstances in writing to the Commission.

(3) If it appears to the Commission that the account or accounts in question is or are no longer dormant, it must revoke any direction under section 107(2) which has previously been given by it to the institution with respect to the relevant charity.

Dormant bank accounts: supplementary

109

(1) No obligation as to secrecy or other restriction on disclosure (however imposed) precludes a relevant institution from disclosing any information to the Commission for the purpose of enabling the Commission to discharge its functions under sections 107 and 108.

(2) For the purposes of sections 107 and 108 and this section, an account is dormant if no transaction, other than—

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

(b) 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 5 years immediately preceding the date when the Commission is informed as mentioned in section 107(1)(a).

(3) For the purposes of sections 107 and 108 and this section, a “relevant institution” means—

(a) the Bank of England (acting otherwise than in its capacity as the Prudential Regulation Authority),

(b) a person who has permission under Part 4A of the Financial Services and Markets Act 2000 to accept deposits,

(d) such other person who may lawfully accept deposits in the United Kingdom as may be prescribed by the Secretary of State.

(4) In subsection (3), paragraphs (b) to (d) are to be read with—

(a) section 22 of the Financial Services and Markets Act 2000,

(b) any relevant order under that section, and

(5) For the purposes of sections 107 and 108, references to the transfer of any amount to a charity are references to its transfer—

(a) to the charity trustees, or

(b) to any trustee for the charity,

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

(6) For the purpose of determining the matters in respect of which any of the powers conferred by sections 46 to 53 (inquiries and searches) may be exercised it is to be assumed that the Commission has no functions under section 107 or 108 in relation to accounts to which this subsection applies.

(This has the result that, for example, a relevant institution is not, in connection with the Commission's functions under sections 107 and 108, required under section 47(2)(a) to provide any statements, or answer any questions or inquiries, with respect to any such accounts held by the institution.)

(7) Subsection (6) applies to accounts which—

(a) are dormant accounts by virtue of subsection (2), but

(b) would not be dormant accounts if subsection (2)(a) were omitted.

Additional powers of Commission

Power to give advice

110

(1) The Commission may, on the written application of any charity trustee or trustee for a charity, give the applicant its opinion or advice in relation to any matter—

(a) relating to the performance of any duties of the applicant, as such a trustee, in relation to the charity concerned, or

(b) otherwise relating to the proper administration of the charity.

(2) A person (“P”) who—

(a) is a charity trustee or trustee for a charity, and

(b) acts in accordance with any opinion or advice given by the Commission under subsection (1) (whether to P or another trustee),

is to be treated, as regards P's responsibility for so acting, as having acted in accordance with P's trust.

(3) But subsection (2) does not apply to P if, when so acting—

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

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

Power to determine membership of charity

111

(1) The Commission may—

(a) on the application of a charity, or

(b) at any time after the institution of an inquiry under section 46 with respect to a charity,

determine who are the members of the charity.

(2) The Commission's power under subsection (1) may also be exercised by a person appointed by the Commission for the purpose.

(3) In a case within subsection (1)(b) the Commission may, if it thinks fit, so appoint the person appointed to conduct the inquiry.

Power to order assessment of solicitor’s bill

112

(1) The Commission may order that a solicitor's bill of costs for business done for a charity, or for charity trustees or trustees for a charity, is to be assessed, together with the costs of the assessment—

(a) by a costs officer in such division of the High Court as may be specified in the order, or

(b) by the costs officer of any other court having jurisdiction to order the assessment of the bill.

(2) On any order under this section for the assessment of a solicitor's bill—

(a) the assessment is to proceed,

(b) the costs officer has the same powers and duties, and

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 assessed.

(3) No order under this section for the assessment of a solicitor's bill is to be made after payment of the bill, unless the Commission is of opinion that it contains exorbitant charges.

(4) No order under this section is to be made in any case where the solicitor's costs are not subject to assessment on an order of the High Court because of—

(a) an agreement as to the solicitor's remuneration, or

(b) the lapse of time since payment of the bill.

Legal proceedings relating to charities

Petitions for winding up charities under Insolvency Act

113

(1) This section applies where a charity may be wound up by the High Court under the Insolvency Act 1986.

(2) A petition for the charity to be wound up under the 1986 Act by any court in England or Wales having jurisdiction may be presented by the Attorney General, as well as by any person authorised by that Act.

(3) Such a petition may also be presented by the Commission if, at any time after it has instituted an inquiry under section 46 with respect to the charity, it is satisfied either as mentioned in section 76(1)(a) (misconduct or mismanagement etc.) or as mentioned in section 76(1)(b) (need to protect property etc.).

(4) The power exercisable by the Commission by virtue of this section is exercisable—

(a) by the Commission of its own motion, but

(b) only with the agreement of the Attorney General on each occasion.

Proceedings by the Commission

114

(1) Subject to subsection (2), the Commission 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) does not apply to the power of the Attorney General under section 113(2) 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 Commission under subsection (1) are 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 is to be treated as requiring the Attorney General to be a party to any such proceedings.

(5) The powers exercisable by the Commission by virtue of this section are exercisable—

(a) by the Commission of its own motion, but

(b) only with the agreement of the Attorney General on each occasion.

Proceedings by other persons

115

(1) Charity proceedings may be taken with reference to a charity by—

(a) the charity,

(b) any of the charity trustees,

(d) if it is a local charity, any two or more inhabitants of the area of the charity,

but not by any other person.

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

(3) The Commission must not, without special reasons, authorise the taking of charity proceedings where in its opinion the case can be dealt with by the Commission under the powers of this Act other than those conferred by section 114.

(4) This section does not require an order for the taking of proceedings—

(a) in a pending cause or matter, or

(b) for the bringing of any appeal.

(5) Where subsections (1) to (4) require the taking of charity proceedings to be authorised by an order of the Commission, 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 subsections (1) to (5) applies—

(a) to the taking of proceedings by the Attorney General, with or without a relator, or

(b) to the taking of proceedings by the Commission in accordance with section 114.

(7) If it appears to the Commission, on an application for an order under this section or otherwise, that it is desirable—

(a) for legal proceedings to be taken with reference to any charity or its property or affairs, and

(b) for the proceedings to be taken by the Attorney General,

the Commission must so inform the Attorney General and send the Attorney General such statements and particulars as the Commission thinks necessary to explain the matter.

(8) In this section “charity proceedings” means proceedings in any court in England or Wales brought under—

(a) the court's jurisdiction with respect to charities, or

(b) the court's jurisdiction with respect to trusts in relation to the administration of a trust for charitable purposes.

Supplementary

Effect of provisions relating to vesting or transfer of property

116

No vesting or transfer of any property in pursuance of any provision of this Part operates as a breach of a covenant or condition against alienation or gives rise to a forfeiture.

Part 7 — Charity land

Restrictions on dispositions of land in England and Wales

Restrictions on dispositions of land: general

117

(1) No land held by or in trust for a charity is to be conveyed, transferred, leased or otherwise disposed of without an order of—

(a) the court, or

(b) the Commission.

But this is subject to the following provisions of this section, sections 119 to 121 (further provisions about restrictions on dispositions) and section 127 (release of charity rentcharges).

(1A) For the purposes of this Part, land is held by or in trust for a charity only if the whole of the land which forms the subject matter of the disposition is held—

(a) by the charity solely for its own benefit (and, accordingly, is not being held as nominee or in trust for another person), or

(b) in trust solely for the charity.

(2) Subsection (1) does 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 section 118), or

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

(b) the requirements of—

(i) section 119(1) (dispositions other than certain leases), or

(ii) section 120(2) (leases which are for 7 years or less etc.),

have been complied with in relation to it.

(3) The restrictions on disposition imposed by this section and sections 119 to 121 apply regardless of anything in the trusts of a charity; but nothing in this section or sections 119 to 121 applies to—

(a) 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—

(i) any statutory provision contained in or having effect under an Act, or

(ii) any scheme legally established,

(aa) any disposition by a liquidator, provisional liquidator, receiver, mortgagee or an administrator,

(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(i) a disposition made with a view to achieving the best price that can reasonably be obtained, or

(ii) a disposition that is a social investment for the purposes of Part 14A (social investments), or

(d) 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.

(4) Nothing in this section or sections 119 to 121 applies to—

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

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

Meaning of “connected person” in s.117(2)

118

(1) In section 117(2) “connected person”, in relation to a charity, means any person who falls within subsection (2)—

(a) at the time of the disposition in question, or

(b) at the time of any contract for the disposition in question.

(2) Subject to subsection (2A), the persons are—

(a) a charity trustee or trustee for the charity,

(b) a person who is the donor of any land to the charity (whether the gift was made on or after the establishment of the charity),

(d) an officer, agent or employee of the charity,

(e) the spouse or civil partner of any person falling within any of paragraphs (a) to (d),

(f) a person carrying on business in partnership with any person falling within any of paragraphs (a) to (e),

(g) an institution which is controlled—

(i) by any person falling within any of paragraphs (a) to (f), or

(ii) by two or more such persons taken together, or

(h) a body corporate in which—

(i) any connected person falling within any of paragraphs (a) to (g) has a substantial interest, or

(ii) two or more such persons, taken together, have a substantial interest.

(2A) A person who is an employee of the charity does not fall within subsection (2)(d) if the disposition in question is the grant of a tenancy—

(a) for a fixed term of one year or less or which is a periodic tenancy and the period is one year or less, and

(b) which confers the right to occupy a dwelling as a home.

(3) Sections 350 to 352 (meaning of child, spouse and civil partner, controlled institution and substantial interest) apply for the purposes of subsection (2).

Requirements for dispositions other than certain leases

119

(1) The requirements mentioned in section 117(2)(b) are that 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 designated adviser instructed by the trustees and acting exclusively for the charity,

(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . and

(c) decide that they are satisfied, having considered the adviser’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.

(2) Subsection (1) does not apply where the proposed disposition is the granting of such a lease as is mentioned in section 120(1).

(3) For the purposes of subsection (1) a designated adviser is a person who—

(a) is a fellow or professional associate of the Royal Institution of Chartered Surveyors or satisfies such other requirement or requirements as may be prescribed by regulations made by the Minister, and

(b) 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.

(4) Any report prepared for the purposes of subsection (1) must ... deal with such matters ... as may be prescribed by regulations made by the Secretary of State.

Requirements for leases which are for 7 years or less etc.

120

(1) Subsection (2) applies where the proposed disposition is the granting of a lease for a term ending not more than 7 years after it is granted (other than one granted wholly or partly in consideration of a fine).

(2) The requirements mentioned in section 117(2)(b) are that 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.

Additional restrictions where land held for stipulated purposes

121

(1) Subsection (2) applies 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.

(2) The land must not be conveyed, transferred, leased or otherwise disposed of unless the charity trustees have before the relevant time—

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

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

(3) Subsection (2)—

(a) is subject to subsections (5) and (6), and

(b) does not affect the operation of sections 117 to 120.

(4) In subsection (2) “the relevant time” means—

(a) where the charity trustees enter into an agreement for the sale, or (as the case may be) for the lease or other disposition, the time when they enter into that agreement, and

(b) in any other case, the time of the disposition.

(5) Subsection (2) does 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 subsection (1)(b), or

(b) the disposition is the granting of a lease for a term ending not more than 2 years after it is granted (other than one granted wholly or partly in consideration of a fine).

(6) The Commission may, if the condition in subsection (7) is met, direct—

(a) that subsection (2) is not to 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 subsection (2) is not to apply to a particular disposition of land held by or in trust for a charity.

(7) The condition is that the Commission, on an application made to it in writing by or behalf of the charity or charities in question, is satisfied that it would be in the interests of the charity or charities for the Commission to give the direction.

Instruments concerning dispositions of land: required statements, etc.

122

(1) Subsection (2) applies to any of the following instruments—

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

(2) An instrument to which this subsection applies must—

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

(b) state whether the charity is an exempt charity,

(c) if the charity is not an exempt charity, state whether the disposition is one falling within section 117(3)(a), (aa), (c) or (d), and

(d) if the charity is not an exempt charity and the disposition is not one falling within section 117(3)(a), (aa), (c) or (d), include the statement required by subsection (2A).

(2A) The statement is—

(a) in a case where section 117(1) applies to the disposition to which the instrument relates, a statement that the disposition has been sanctioned by an order of the court or of the Charity Commission, or

(b) in a case where section 117(2) applies to the disposition to which the instrument relates, a statement that there is power under the trusts of the charity to effect the disposition and that sections 117 to 121 have been complied with.

(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(4) Where subsection (2)(d) has been complied with in relation to a contract for the disposition of land it is conclusively presumed, for the purposes of enforcing the contract, that the statement is true.

(4A) Where subsection (2)(d) has been complied with in relation to an instrument effecting the disposition of land it is conclusively presumed, in favour of a person who (whether under the disposition or afterwards) acquires an interest in the land for money or money’s worth, that the statement is true.

(5) Where subsection (2)(d) applies in relation to a contract for the disposition of land but the statement required by subsection (2A) has not been included in it, then in favour of a person who has entered into the contract in good faith the contract is enforceable as if—

(a) the disposition to which the contract relates had been sanctioned by an order of the court or of the Charity Commission, or

(b) there is power under the trusts of the charity to effect such a disposition and sections 117 to 121 have been complied with.

(5A) Where subsection (2)(d) applies in relation to an instrument effecting the disposition of land but the statement required by subsection (2A) has not been included in it, 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 is valid even if—

(a) the disposition has not been sanctioned by an order of the court or of the Charity Commission, or

(b) there is no power under the trusts of the charity to effect the disposition or sections 117 to 121 have not been complied with in relation to it (or both).

(7) Subsection (8) applies to any of the following instruments—

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

(8) An instrument to which this subsection applies must state—

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

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

(c) if it is not an exempt charity, that the restrictions on disposition imposed by sections 117 to 121 will apply to the land (subject to section 117(3)).

(9) In this section and section 123 references to a disposition of land do not include references to—

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

(b) any disposition of an advowson, or

Charity land and land registration

123

(1) Where the disposition to be effected by any such instrument as is mentioned in section 122(1)(b) or (7)(b) will be—

(a) a registrable disposition, or

(b) a disposition which triggers the requirement of registration,

the statement which, by virtue of section 122(2) or (8), is to be contained in the instrument must be in such form as may be prescribed by land registration rules.

(2) Where the registrar approves an application for registration of—

(a) a disposition of registered land, or

(b) a person's title under a disposition of unregistered land,

and the instrument effecting the disposition contains a statement complying with section 122(8) and subsection (1), the registrar must enter in the register a restriction reflecting the limitation under sections 117 to 121 on subsequent disposal.

(3) 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 must apply to the registrar for the removal of the entry.

(4) On receiving any application duly made under subsection (3) the registrar must remove the entry.

(5) 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 must apply to the registrar for such a restriction as is mentioned in subsection (2) to be entered in the register in respect of the land.

(6) On receiving any application duly made under subsection (5) the registrar must enter such a restriction in the register in respect of the land.

Restrictions on mortgages of land in England and Wales

Restrictions on mortgages

124

(1) Subject to subsection (2), no mortgage of land held by or in trust for a charity is to be granted without an order of—

(a) the court, or

(b) the Commission.

(2) Subsection (1) does not apply to a mortgage of any such land if the charity trustees have, before executing the mortgage, obtained and considered proper advice, given to them in writing, on the relevant matters or matter mentioned in subsection (3) or (4) (as the case may be).

(3) In the case of a mortgage to secure the repayment of a proposed loan or grant, the relevant matters are—

(a) whether the loan or grant is necessary in order for the charity trustees to be able to pursue the particular course of action in connection with which they are seeking the loan or grant,

(b) whether the terms of the loan or grant are reasonable having regard to the status of the charity as the prospective recipient of the loan or grant, and

(4) In the case of a mortgage to secure the discharge of any other proposed obligation, the relevant matter is whether it is reasonable for the charity trustees to undertake to discharge the obligation, having regard to the charity's purposes.

(5) Subsection (3) or (as the case may be) subsection (4) applies in relation to such a mortgage as is mentioned in that subsection whether the mortgage—

(a) would only have effect to secure the repayment of the proposed loan or grant or the discharge of the proposed obligation, or

(b) would also have effect to secure the repayment of sums paid by way of loan or grant, or the discharge of other obligations undertaken, after the date of its execution.

(6) Subsection (7) applies where—

(a) the charity trustees of a charity have executed a mortgage of land held by or in trust for a charity in accordance with subsection (2), and

(b) the mortgage has effect to secure the repayment of sums paid by way of loan or grant, or the discharge of other obligations undertaken, after the date of its execution.

(7) In such a case, the charity trustees must not after that date enter into any transaction involving—

(a) the payment of any such sums, or

(b) the undertaking of any such obligations,

unless they have, before entering into the transaction, obtained and considered proper advice, given to them in writing, on the matters or matter mentioned in subsection (3)(a) to (c) or (4) (as the case may be).

(8) For the purposes of this section proper advice is the advice of a person—

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

(b) who has no financial interest in relation to the loan, grant or other transaction in connection with which the advice is given.

...

(9) This section applies regardless of anything in the trusts of a charity; but nothing in this section applies to any mortgage—

(a) for which general or special authority is given as mentioned in section 117(3)(a), or

(aa) granted by a liquidator, provisional liquidator, receiver, mortgagee or an administrator.

(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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

Mortgages: required statements, etc.

125

(1) Any mortgage of land held by or in trust for a charity must—

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

(b) state whether the charity is an exempt charity and whether the mortgage is one falling within section 124(9), and

(c) if the charity is not an exempt charity and the mortgage is not one falling within section 124(9), include the statement required by subsection (1A).

(1A) The statement is—

(a) in a case where section 124(1) applies, a statement that the mortgage has been sanctioned by an order of the court or of the Charity Commission, or

(b) in a case where section 124(2) applies, a statement that there is power under the trusts of the charity to grant the mortgage and the requirements of section 124(2) have been complied with.

(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3) Where subsection (1)(c) 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 is conclusively presumed that the statement is true.

(5) Where subsection (1)(c) applies in relation to a mortgage of land but the statement required by subsection (1A) has not been included in it, 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 is valid even if—

(a) the mortgage has not been sanctioned by an order of the court or of the Charity Commission, or

(b) there is no power under the trusts of the charity to grant the mortgage or the requirements of section 124(2) have not been complied with in relation to it (or both).

(6) Where section 124(7) applies to any mortgage of land held by or in trust for a charity, the charity trustees must certify in relation to any transaction falling within section 124(7) that they have obtained and considered such advice as is mentioned in section 124(7).

(7) Where subsection (6) has been complied with in relation to any transaction, then, in favour of a person who (whether under the mortgage or afterwards) has acquired or acquires an interest in the land for money or money's worth, it is conclusively presumed that the facts were as stated in the certificate.

Mortgages of charity land and land registration

126

(1) Where the mortgage referred to in section 125(1) will be a registrable disposition, the statement required by section 125(1) must be in such form as may be prescribed by land registration rules.

(2) Where any such mortgage will be one to which section 4(1)(g) of the Land Registration Act 2002 applies—

(a) the statement required by section 125(1) must be in such form as may be prescribed by land registration rules, and

(b) if the charity is not an exempt charity, the mortgage must also contain a statement, in such form as may be prescribed by land registration rules, that the restrictions on disposition imposed by sections 117 to 121 apply to the land (subject to section 117(3)).

(3) Where—

(a) the registrar approves an application for registration of a person's title to land in connection with such a mortgage as is mentioned in subsection (2),

(b) the mortgage contains statements complying with section 125(1) and subsection (2), and

the registrar must enter in the register a restriction reflecting the limitation under sections 117 to 121 on subsequent disposal.

(4) Subsections (3) and (4) of section 123 (removal of entry) apply in relation to any restriction entered under subsection (3) as they apply in relation to any restriction entered under section 123(2).

Release of charity rentcharges

127

(1) Section 117(1) does 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 10 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 £1,000, any costs incurred by the charity in connection with proving its title to the rentcharge are recoverable by the charity from the person or persons in whose favour the rentcharge is being released.

(3) Neither section 117(1) nor subsection (2) of this section applies where a rentcharge which a charity is entitled to receive is redeemed under sections 8 to 10 of the Rentcharges Act 1977.

Power to alter sum specified in s.127(2)

128

The Secretary of State may by order amend section 127(2) by substituting a different sum for the sum for the time being specified there.

Interpretation

129

(1) In sections 117 to 126 “land” means land in England and Wales.

(2) In sections 124 to 126 “mortgage” includes a charge.

(3) Sections 123 and 126 are to be construed as one with the Land Registration Act 2002.

Part 8 — Charity accounts, reports and returns

CHAPTER 1 — Individual accounts

Accounting records

130

(1) The charity trustees of a charity must 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 132(1), those statements of accounts comply with the requirements of regulations under section 132(1).

(2) The accounting records must 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.

Preservation of accounting records

131

(1) The charity trustees of a charity must preserve any accounting records made for the purposes of section 130 in respect of the charity for at least 6 years from the end of the financial year of the charity in which they are made.

(2) Subsection (3) applies if a charity ceases to exist within the period of 6 years mentioned in subsection (1) as it applies to any accounting records.

(3) The obligation to preserve the accounting records in accordance with subsection (1) must continue to be discharged by the last charity trustees of the charity, unless the Commission consents in writing to the records being destroyed or otherwise disposed of.

Preparation of statement of accounts

132

(1) The charity trustees of a charity must (subject to section 133) 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) Regulations under subsection (1) may in particular 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.

(3) Regulations under subsection (1) may also make provision for determining the financial years of a charity for the purposes of this Act and any regulations made under it.

(4) But regulations under subsection (1) may not impose on the charity trustees of a charity that is a charitable trust created by any person (“the settlor”) any requirement to disclose, in any statement of accounts prepared by them under subsection (1)—

(a) the identities of recipients of grants made out of the funds of the charity, or

(b) the amounts of any individual grants so made,

if the disclosure would fall to be made at a time when the settlor or any spouse or civil partner of the settlor was still alive.

Account and statement an option for lower-income charities

133

If a charity's gross income in any financial year does not exceed £250,000, the charity trustees may, in respect of that year, elect to prepare—

(a) a receipts and payments account, and

(b) a statement of assets and liabilities,

instead of a statement of accounts under section 132(1).

Preservation of statement of accounts or account and statement

134

(1) The charity trustees of a charity must preserve—

(a) any statement of accounts prepared by them under section 132(1), or

(b) any account and statement prepared by them under section 133,

for at least 6 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.

(2) Subsection (3) applies if a charity ceases to exist within the period of 6 years mentioned in subsection (1) as it applies to any statement of accounts or account and statement.

(3) The obligation to preserve the statement or account and statement in accordance with subsection (1) must continue to be discharged by the last charity trustees of the charity, unless the Commission consents in writing to the statement or account and statement being destroyed or otherwise disposed of.

Charitable companies

135

Nothing in sections 130 to 134 (preparation and preservation of individual accounts) applies to a charitable company.

Exempt charities

136

(1) Nothing in sections 130 to 134 (preparation and preservation of individual accounts) applies to an exempt charity.

(2) But the charity trustees of an exempt charity—

(a) must keep proper books of account with respect to the affairs of the charity, and

(b) if not required by or under the authority of any other Act to prepare periodical statements of account must prepare consecutive statements of account consisting on each occasion of—

(i) an income and expenditure account relating to a period of not more than 15 months, and

(ii) a balance sheet relating to the end of that period.

(3) The books of accounts and statements of account relating to an exempt charity must be preserved for a period of at least 6 years unless—

(a) the charity ceases to exist, and

(b) the Commission consents in writing to their being destroyed or otherwise disposed of.

CHAPTER 2 — Group accounts

Accounting records

137

(1) The charity trustees of a parent charity or of any charity which is a subsidiary undertaking must ensure that the accounting records kept in respect of the charity under—

(a) section 130(1) (individual accounts: accounting records), or

(b) (as the case may be) section 386 of the Companies Act 2006 (duty to keep accounting records),

are such as to enable the charity trustees of the parent charity to ensure that, where any group accounts are prepared by them under section 138(2), those accounts comply with the requirements of regulations under section 142.

(2) The duty in subsection (1) is in addition to the duty to ensure that the accounting records comply with the requirements of—

(a) section 130(1), or

(b) section 386 of the Companies Act 2006.

(3) Subsection (4) applies if a parent charity has a subsidiary undertaking in relation to which the requirements of—

(a) section 130(1), or

(b) section 386 of the Companies Act 2006,

do not apply.

(4) The charity trustees of the parent charity must take reasonable steps to secure that the undertaking keeps such accounting records as to enable the trustees to ensure that, where any group accounts are prepared by them under section 138(2), those accounts comply with the requirements of regulations under section 142.

Preparation of group accounts

138

(1) This section applies in relation to a financial year of a charity if—

(a) the charity is a parent charity at the end of that year, and

(b) (where it is a company) it is not required to prepare consolidated accounts for that year under section 399 of the Companies Act 2006 (duty to prepare group accounts), whether or not such accounts are in fact prepared.

(2) The charity trustees of the parent charity must prepare group accounts in respect of that year.

(3) If the requirement in subsection (2) applies to the charity trustees of a parent charity (other than a parent charity which is a company) in relation to a financial year—

(a) that requirement so applies in addition to the requirement in section 132(1) (statement of accounts), and

(b) the option of preparing the documents mentioned in section 133 (account and statement) is not available in relation to that year (whatever the amount of the charity's gross income for that year).

(4) If—

(a) the requirement in subsection (2) applies to the charity trustees of a parent charity in relation to a financial year, and

(b) the charity is a company,

that requirement so applies in addition to the requirement in section 394 of the Companies Act 2006 (duty to prepare individual accounts).

(5) Subsection (2) is subject to section 139.

Exceptions to requirement to prepare group accounts

139

(1) The requirement in section 138(2) does not apply to the charity trustees of a parent charity in relation to a financial year if at the end of that year it is itself a subsidiary undertaking in relation to another charity.

(2) The requirement in section 138(2) does not apply to the charity trustees of a parent charity in relation to a financial year if the aggregate gross income of the group for that year does not exceed such sum as is specified in regulations made by the Secretary of State.

(3) Regulations made by the Secretary of State may prescribe circumstances in which a subsidiary undertaking may or (as the case may be) must be excluded from group accounts required to be prepared under section 138(2) for a financial year.

(4) Where, by virtue of such regulations, each of the subsidiary undertakings which are members of a group is—

(a) permitted to be excluded from any such group accounts for a financial year, or

(b) required to be so excluded,

the requirement in section 138(2) does not apply to the charity trustees of the parent charity in relation to that year.

Preservation of group accounts

140

(1) The charity trustees of a charity must preserve any group accounts prepared by them under section 138(2) for at least 6 years from the end of the financial year to which the accounts relate.

(2) Subsection (3) applies if a charity ceases to exist within the period of 6 years mentioned in subsection (1) as it applies to any group accounts.

(3) The obligation to preserve the accounts in accordance with subsection (1) must continue to be discharged by the last charity trustees of the charity, unless the Commission consents in writing to the accounts being destroyed or otherwise disposed of.

“Parent charity”, “subsidiary undertaking” and “group”

141

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

(2) A charity is a parent charity if it is (or is to be treated as) a parent undertaking in relation to one or more other undertakings in accordance with the provisions of section 1162 of, and Schedule 7 to, the Companies Act 2006.

(3) Each undertaking in relation to which a parent charity is (or is to be treated as) a parent undertaking in accordance with those provisions is a subsidiary undertaking in relation to the parent charity.

(4) But subsection (3) does not have the result that any of the following is a subsidiary undertaking—

(a) any special trusts of a charity,

(b) any institution which, by virtue of a direction under section 12(1), is to be treated as forming part of a charity for the purposes of this Part, or

(5) “The group”, in relation to a parent charity, means that charity and its subsidiary undertaking or undertakings, and any reference to the members of the group is to be read accordingly.

(6) For the purposes of this section and the operation for those purposes of section 1162 of, and Schedule 7 to, the Companies Act 2006 “undertaking” means—

(a) an undertaking as defined by section 1161(1) of the 2006 Act, or

(b) a charity which is not an undertaking as so defined.

“Group accounts”

142

(1) For the purposes of this Part, “group accounts” means consolidated accounts—

(a) relating to the group, and

(b) complying with such requirements as to their form and contents as may be prescribed by regulations made by the Secretary of State.

(2) Regulations under subsection (1) may in particular make provision—

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

(b) for dealing with cases where the financial years of the members of the group do not all coincide;

(3) Regulations under subsection (1) may also make provision—

(a) for determining the financial years of subsidiary undertakings for the purposes of this Part;

(b) for imposing on the charity trustees of a parent charity requirements with respect to securing that such financial years coincide with that of the charity.

Exempt charities

143

Nothing in sections 137 to 142 (preparation and preservation of group accounts) applies to an exempt charity.

CHAPTER 3 — Audit or examination of accounts

Audit or examination of individual accounts

Audit of accounts of larger charities

144

(1) Subsection (2) applies to a financial year of a charity if—

(a) the charity's gross income in that year exceeds £1 million, or

(b) the charity's gross income in that year exceeds the accounts threshold and at the end of the year the aggregate value of its assets (before deduction of liabilities) exceeds £3.26 million.

“The accounts threshold” means the sum for the time being specified in section 133 (account and statement an option for lower-income charities).

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

(a) is eligible for appointment as a statutory auditor under Part 42 of the Companies Act 2006, or

(b) is a member of a body for the time being specified in regulations under section 154 and is under the rules of that body eligible for appointment as auditor of the charity.

Examination of accounts an option for lower-income charities

145

(1) If section 144(2) does not apply to a financial year of a charity but its gross income in that year exceeds £25,000, the accounts of the charity for that year must, at the election of the charity trustees, be—

(a) examined by an independent examiner, that is, 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) audited by a person within section 144(2)(a) or (b).

(2) Subsection (1) is subject to—

(a) subsection (3), and

(b) any order under section 146(1).

(3) If subsection (1) applies to the accounts of a charity for a year and the charity's gross income in that year exceeds £250,000, a person qualifies as an independent examiner for the purposes of subsection (1)(a) if (and only if) the person is independent and—

(a) a member of one of the bodies listed in subsection (4), or

(b) a Fellow of the Association of Charity Independent Examiners.

(4) The bodies referred to in subsection (3)(a) are—

(a) the Institute of Chartered Accountants in England and Wales;

(b) the Institute of Chartered Accountants of Scotland;

(d) the Association of Chartered Certified Accountants;

(e) the Association of Authorised Public Accountants;

(f) the Association of Accounting Technicians;

(g) the Association of International Accountants;

(h) the Chartered Institute of Management Accountants;

(i) the Institute of Chartered Secretaries and Administrators;

(j) the Chartered Institute of Public Finance and Accountancy.

(k) the Institute of Financial Accountants;

(l) the Certified Public Accountants Association.

(5) The Commission 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 it thinks appropriate with respect to the carrying out of an examination in pursuance of subsection (1)(a);

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

(6) The Secretary of State may by order—

(a) amend subsection (3) by adding or removing a description of person to or from the list in that subsection or by varying any entry for the time being included in that list;

(b) amend subsection (4) by adding or removing a body to or from the list in that subsection or by varying any entry for the time being included in that list.

Commission’s powers to order audit

146

(1) The Commission may by order require the accounts of a charity for a financial year to be audited by a person within section 144(2)(a) or (b) if it appears to the Commission that—

(a) section 144(2), or (as the case may be) section 145(1), has not been complied with in relation to that year within 10 months from the end of that year, or

(b) although section 144(2) does not apply to that year, it would nevertheless be desirable for the accounts of the charity for that year to be audited by a person within section 144(2)(a) or (b).

(2) If the Commission makes an order under subsection (1) with respect to a charity, the auditor must be a person appointed by the Commission unless—

(a) the order is made by virtue of subsection (1)(b), and

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

(3) The expenses of any audit carried out by an auditor appointed by the Commission under subsection (2), including the auditor's remuneration, are recoverable by the Commission—

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

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

Accounts required to be audited under Companies Act

147

(1) Nothing in sections 144 to 146 applies in relation to the accounts of a charitable company for a financial year if those accounts are required to be audited in accordance with Part 16 of the Companies Act 2006 (“Part 16 accounts”).

(2) In the case of a charitable company, the Commission may by order require that the condition and Part 16 accounts of the company for such period as the Commission thinks fit are to be investigated and audited by an auditor who—

(a) is eligible for appointment as a statutory auditor under Part 42 of the Companies Act 2006, and

(b) is appointed by the Commission.

(3) An auditor acting under subsection (2)—

(a) has a right of access to all books, accounts and documents relating to the company which are in the possession or control of the charity trustees or to which the charity trustees have access;

(b) is entitled to require from any charity trustee, past or present, and from any past or present officer or employee of the company such information and explanation as the auditor thinks necessary for the performance of the auditor's duties;

(c) must at the conclusion or during the progress of the audit make such reports to the Commission about the audit or about the accounts or affairs of the company as the auditor thinks the case requires, and must send a copy of any such report to the charity trustees.

(4) The expenses of any audit under subsection (2) including the remuneration of the auditor, are to be paid by the Commission.

(5) If any person fails to afford an auditor any facility to which the auditor is entitled under subsection (3), the Commission may by order give to that person or to the charity trustees for the time being such directions as the Commission thinks appropriate for securing that the default is made good.

NHS charities: general

148

Nothing in sections 144 to 146 applies in relation to a financial year of a charity where, at any time in the year, it is—

(a) an English NHS charity (as defined in section 149), or

(b) a Welsh NHS charity (as defined in section 150).

Audit or examination of English NHS charity accounts

149

(1) This section applies in relation to a financial year of a charity where, at any time in the year, it is an English NHS charity.

(2) If section 144(1)(a) or (b) is satisfied in relation to that financial year of the charity, the accounts of the charity for that year must be audited by a person who—

(a) is eligible for appointment as a statutory auditor under Part 42 of the Companies Act 2006,

(b) is eligible for appointment as a local auditor (see Part 4 of the Local Audit and Accountability Act 2014), or

(c) is a member of a body for the time being specified in regulations under section 154 and is under the rules of that body eligible for appointment as auditor of the charity.

(3) In any other case, the accounts of the charity for that financial year must, at the election of the charity trustees, be—

(a) audited by a person who is within subsection (2)(a), (b) or (c), or

(b) examined by a person who is qualified to be an independent examiner.

(3A) For the purposes of subsection (3)(b), a person is qualified to be an independent examiner if (and only if)—

(a) the person is independent,

(b) the charity trustees reasonably believe that the person has the requisite ability and practical experience to carry out a competent examination of the accounts, and

(i) falls within a description of person for the time being included in the list in section 145(3), or

(ii) is eligible for appointment as a local auditor (see Part 4 of the Local Audit and Accountability Act 2014).

(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(5) The Commission may—

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

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

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

(6) The Comptroller and Auditor General may at any time examine and inspect—

(a) the accounts of the charity for the financial year,

(b) any records relating to those accounts, and

(7) In this section, “English NHS charity” means a charitable trust, the trustees of which are—

(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(ba) NHS England,

(bb) an integrated care board,

(bc) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(bd) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(c) a National Health Service trust all or most of whose hospitals, establishments and facilities are situated in England,

(d) trustees appointed in pursuance of paragraph 10 of Schedule 4 to the National Health Service Act 2006 for a National Health Service trust falling within paragraph (c),

(e) special trustees appointed in pursuance of section 29(1) of the National Health Service Reorganisation Act 1973, section 95(1) of the National Health Service Act 1977 and section 212(1) of the National Health Service Act 2006 for such a National Health Service trust, or

(f) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(8) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Audit or examination of Welsh NHS charity accounts

150

(1) This section applies in relation to a financial year of a charity where, at any time in the year, it is a Welsh NHS charity.

(2) If section 144(1)(a) or (b) is satisfied in relation to that financial year of the charity, the accounts of the charity for that year must be audited by the Auditor General for Wales.

(3) In any other case, the accounts of the charity for that financial year must, at the election of the Auditor General for Wales, be audited or examined by the Auditor General for Wales.

(4) In this section “Welsh NHS charity” means a charitable trust, the trustees of which are—

(a) a Local Health Board,

(b) a National Health Service trust all or most of whose hospitals, establishments and facilities are situated in Wales,

(c) trustees appointed in pursuance of paragraph 10 of Schedule 3 to the National Health Service (Wales) Act 2006 for a National Health Service trust falling within paragraph (b), or

(d) special trustees appointed in pursuance of section 29(1) of the National Health Service Reorganisation Act 1973, section 95(1) of the National Health Service Act 1977 and section 160(1) of the National Health Service (Wales) Act 2006 for such a National Health Service trust.

(5) References in this Act to an auditor or an examiner have effect in relation to this section as references to the Auditor General for Wales acting under this section as an auditor or examiner.

Audit or examination of group accounts

Audit of accounts of larger groups

151

(1) This section applies where group accounts are prepared for a financial year of a parent charity under section 138(2) and—

(a) the aggregate gross income of the group in that year exceeds the relevant income threshold (see section 176(1)), or

(b) the aggregate gross income of the group in that year exceeds the relevant income threshold and at the end of the year the aggregate value of the assets of the group (before deduction of liabilities) exceeds the relevant assets threshold (see section 176(2)).

(2) This section also applies where—

(a) group accounts are prepared for a financial year of a parent charity under section 138(2), and

(b) the appropriate audit provision applies in relation to the parent charity's own accounts for that year.

(3) In this section “the appropriate audit provision”, in relation to a financial year of a parent charity, means—

(a) (subject to paragraph (b), (c) or (d)) section 144(2) (audit of accounts of larger charities);

(b) if section 149 (audit or examination of English NHS charity accounts) applies in relation to that year, section 149(2);

(c) if section 150 (audit or examination of Welsh NHS charity accounts) applies in relation to that year, section 150(2);

(d) if the parent charity is a company—

(i) section 144(2), or

(ii) (as the case may be) Part 16 of the Companies Act 2006.

(4) If this section applies in relation to a financial year of a parent charity by virtue of subsection (1) or (2), the group accounts for that year must be audited—

(a) (subject to paragraph (b) or (c)) by a person within section 144(2)(a) or (b);

(b) if section 149 applies in relation to that year, by a person, appointed by the charity trustees of the parent charity, who is within section 149(2)(a), (b) or (c) ;

(5) If this section applies in relation to a financial year of a parent charity by virtue of subsection (1)—

(a) (subject to paragraph (b)) the appropriate audit provision applies in relation to the parent charity's own accounts for that year (whether or not it would otherwise so apply);

(b) if the parent charity is a company and its own accounts for that year are not required to be audited in accordance with Part 16 of the Companies Act 2006, section 144(2) applies in relation to those accounts (whether or not it would otherwise so apply).

(6) Section 149(6) applies in relation to any appointment under subsection (4)(b) as it applies in relation to an appointment under section 149(2).

(7) References in this Act to an auditor have effect in relation to subsection (4)(c) as references to the Auditor General for Wales acting under subsection (4)(c) as an auditor.

Examination of accounts an option for smaller groups

152

(1) This section applies if—

(a) group accounts are prepared for a financial year of a parent charity under section 138(2), and

(b) section 151 (audit of accounts of larger groups) does not apply in relation to that year.

(2) If—

(a) this section applies in relation to a financial year of a parent charity,

(b) the aggregate gross income of the group in that year exceeds the sum specified in section 145(1), and

the group accounts for that year must, at the election of the charity trustees of the parent charity, be examined by an independent examiner (as defined in section 145(1)(a)) or audited by a person within section 144(2)(a) or (b).

(3) Subsection (2) is subject to—

(a) subsection (4), and

(b) any order under section 153(1).

(4) If subsection (2) applies to the group accounts for a year and the aggregate gross income of the group in that year exceeds the sum specified in section 145(3), a person qualifies as an independent examiner for the purposes of subsection (2) if (and only if) the person is independent and meets the requirements of section 145(3)(a) or (b).

(5) The Commission may—

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

(b) give such directions as it thinks appropriate with respect to the carrying out of an examination in pursuance of subsection (2);

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

(6) If—

(a) this section applies in relation to a financial year of a parent charity, and

(b) section 149 (audit or examination of English NHS charity accounts) also applies in relation to that year,

the group accounts for that year must at the election of the charity trustees of the parent charity be audited by a person, appointed by those trustees, who is within section 149(2)(a), (b) or (c); or examined by a person, appointed by those trustees, who is qualified to be an independent examiner .

Subsections (3A), (5) and (6) of section 149 apply for the purposes of this subsection as they apply for the purposes of section 149(3); except that in subsection (3A)(b) of that section the reference to “the charity trustees” is to be read as a reference to “the charity trustees of the parent charity.

(7) If—

(a) this section applies in relation to a financial year of a parent charity, and

(b) section 150 (audit or examination of Welsh NHS charity accounts) also applies in relation to that year,

the group accounts for that year must, at the election of the Auditor General for Wales, be audited or examined by the Auditor General for Wales.

References in this Act to an auditor or an examiner have effect in relation to this subsection as references to the Auditor General for Wales acting under this subsection as an auditor or examiner.

(8) If the group accounts for a financial year of a parent charity are to be examined or audited in accordance with subsection (2), section 145(1) applies in relation to the parent charity's own accounts for that year (whether or not it would otherwise so apply).

(9) Nothing in subsection (6) or (7) affects the operation of section 149(3) to (6) or (as the case may be) section 150(3) in relation to the parent charity's own accounts for the financial year in question.

Commission’s powers to order audit of group accounts

153

(1) The Commission may by order require the group accounts of a parent charity for a financial year to be audited by a person within section 144(2)(a) or (b) if it appears to the Commission that—

(a) section 151(4)(a), or (as the case may be) section 152(2), has not been complied with in relation to that year within 10 months from the end of that year, or

(b) although section 151(4)(a) does not apply to that year, it would nevertheless be desirable for the group accounts for that year to be audited by a person within section 144(2)(a) or (b).

But this subsection does not apply if section 149 or 150 (audit or examination of NHS charity accounts) applies in relation to the parent charity for that year.

(2) If the Commission makes an order under subsection (1) with respect to group accounts, the auditor must be a person appointed by the Commission unless—

(a) the order is made by virtue of subsection (1)(b), and

(b) the charity trustees of the parent charity themselves appoint an auditor in accordance with the order.

(3) The expenses of any audit carried out by an auditor appointed by the Commission under subsection (2), including the auditor's remuneration, are recoverable by the Commission—

(a) from the charity trustees of the parent charity, who are personally liable, jointly and severally, for those expenses, or

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

Regulations relating to audits and examinations

154

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

(a) specifying one or more bodies for the purposes of section 144(2)(b);

(aa) specifying one or more bodies for the purposes of section 149(2)(c);

(b) with respect to the duties of an auditor carrying out an audit of individual or group accounts, including provision with respect to the making by the auditor of a report on—

(i) the statement of accounts prepared for the financial year in question under section 132(1),

(ii) the account and statement so prepared under section 133,

(iii) the accounts so prepared under section 394 of the Companies Act 2006 (duty to prepare individual accounts), or

(iv) group accounts so prepared under section 138(2),

as the case may be;

(c) with respect to the making of a report in respect of an examination of individual or group accounts by the independent examiner or examiner who has carried out the examination;

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

(i) the charity (if the audit or examination is of individual accounts), or

(ii) any member of the group (if the audit or examination is of group accounts);

(e) entitling an auditor or an independent examiner or examiner to require information and explanations from—

(i) past or present charity trustees or trustees for, or past or present officers or employees of, the charity (if the audit or examination is of individual accounts), or

(ii) past or present charity trustees or trustees for, or past or present officers or employees of, any member of the group (if the audit or examination is of group accounts);

(f) enabling the Commission, in circumstances specified in the regulations, to dispense with the requirements of section 144(2), 145(1), 151(4)(a) or 152(2)—

(i) in the case of a particular charity, or

(ii) in the case of any particular financial year of a charity.

(2) Regulations under subsection (1)(e) may in particular make, in relation to audits or examinations of group accounts, provision corresponding or similar to any provision made by section 499 or 500 of the Companies Act 2006 in connection with the rights exercisable by an auditor of a company in relation to a subsidiary undertaking of the company.

(3) In this section—

“audit of individual or group accounts” means an audit under—section 144, 145, 146, 149 or 150 (individual accounts), orsection 151, 152 or 153 (group accounts);

“examination of individual or group accounts” means an examination under—section 145, 149 or 150 (individual accounts), orsection 152 (group accounts);

and the references in this section and section 155 to an audit or examination of individual accounts and to an audit or examination of group accounts are to be read accordingly.

Power of Commission to direct compliance with certain regulations

155

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