SCHEDULE 2TRANSITIONAL AND TRANSITORY PROVISIONS AND SAVINGS
PART 1ACCOUNTS AND REPORTS
CHAPTER 1NEW EXEMPT CHARITIES
Application of Part 6 of and Schedule 5A to the 1993 Act to new exempt charities in respect of the current and earlier financial years1
Part 6 of and Schedule 5A to the 1993 Act (Charity Accounts, Reports and Returns)16 continue to apply to a new exempt charity in relation to any financial year of the charity which began before the appointed day as if the charity had not become an exempt charity.
Accounts to be prepared under section 46 of the 1993 Act by new exempt charities2
Where a new exempt charity is not required by or under the authority of any Act other than the 1993 Act to prepare periodical statements of account, the first statement of account which the charity produces under section 46(1) of the 1993 Act must relate to a period of not more than 15 months beginning on the day immediately following the last day of the current financial year.
CHAPTER 2FORMERLY EXEMPT CHARITIES
Accounts to be prepared and retained by formerly exempt charities in respect of current financial years3
Subsections (1) and (2) of section 46 of the 1993 Act continue to apply to a formerly exempt charity in relation to—
a
the current financial year of that charity; and
b
the books of accounts and statements of account prepared in respect of any financial year of the charity which began before the appointed day.
Charity Commission not to request annual reports from certain formerly exempt charities4
The Charity Commission may not require, under section 46(5) of the 1993 Act, the charity trustees of a formerly exempt charity to prepare an annual report in respect of the current financial year of the charity.
Requests for accounts made to formerly exempt charities5
1
Where a qualifying request is made, the accounts to be treated as the most recent accounts of the formerly exempt charity are the accounts specified in sub-paragraph (2).
2
The specified accounts are—
a
the accounts of the charity most recently audited in pursuance of any statutory or other requirement; or
b
if its accounts were not required to be so audited, the accounts most recently prepared in respect of that charity.
3
In this paragraph, “qualifying request” means a request made under section 47(2) of the 1993 Act for the most recent accounts of a formerly exempt charity at any time before—
a
in the case of a formerly exempt charity which is a company, the charity trustees of that charity have prepared an annual report under section 45 of that Act in respect of the financial year of the charity beginning immediately after the current financial year; or
b
in any other case, the charity trustees of that charity have prepared—
i
a statement of accounts under section 42(1) of that Act; or
ii
an account and statement under section 42(3) of that Act,
in respect of the financial year of the charity beginning immediately after the current financial year.
PART 2JURISDICTION OF THE CHARITY COMMISSION AND COURT IN RELATION TO NEW EXEMPT AND FORMERLY EXEMPT CHARITIES
CHAPTER 1NEW EXEMPT CHARITIES
Inquiries under section 8 of the 1993 Act relating to new exempt charities6
1
The Charity Commission may for the purpose of any relevant inquiry continue to treat a new exempt charity as if it had not become an exempt charity.
2
The Charity Commission must notify the principal regulator of the relevant exempt charity of any decision to continue any inquiry with regard to that charity.
3
In this paragraph “relevant inquiry” means, in relation to a new exempt charity, an inquiry which was instituted under section 8 of the 1993 Act—
a
before the appointed day; and
b
with regard to that charity or a class of charities into which it falls.
Power to act for the protection of charities7
1
The Charity Commission may take any action, on or after the appointed day, in relation to—
a
a new exempt charity which is or was the subject of a relevant inquiry; or
b
the charity trustees of such a charity,
that it could take under the 1993 Act in relation to a charity which is not an exempt charity or (as the case may be) the charity trustees of a charity that is not an exempt charity.
2
The Charity Commission must notify the principal regulator of the relevant new exempt charity of any action taken in reliance on sub-paragraph (1) above.
3
In this paragraph “relevant inquiry” has the meaning given by paragraph 6.
Need for an order under section 36 of the 1993 Act in relation to a new exempt charity8
1
Section 36 of the 1993 Act continues to apply to a relevant disposition of land held by or in trust for a new exempt charity as it applies to a disposition of land held by or in trust for a charity which is not an exempt charity.
2
A disposition of land held by or in trust for a new exempt charity is a “relevant disposition” if the charity trustees—
a
proposed that the land in question be disposed of (whether by conveyance, transfer, lease or otherwise) before the appointed day; but
b
the relevant disposition had not been effected before that day.
Need for an order under section 38 of the 1993 Act in relation to a new exempt charity9
1
Section 38 of the 1993 Act continues to apply to a relevant mortgage of land held by or in trust for a new exempt charity as it applies to a mortgage of land held by or in trust for a charity which is not an exempt charity.
2
A mortgage of land held by or in trust for a new exempt charity is a “relevant mortgage” if the charity trustees—
a
proposed that the mortgage be executed before the appointed day; but
b
had not executed it before that day.
3
For the purposes of sub-paragraph (2) it does not matter whether the mortgage—
a
will only have effect to secure the repayment of sums paid by way of the proposed loan or grant or discharge of the proposed obligation; or
b
will 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.
4
In this paragraph “mortgage” has the meaning given by section 38 of the 1993 Act.
CHAPTER 2FORMERLY EXEMPT CHARITIES
Inquiries under section 8 of the 1993 Act relating to formerly exempt charities10
1
Subject to sub-paragraph (2), the Charity Commission must not instigate any inquiry under section 8 of the 1993 Act on or after the appointed day—
a
in relation to one or more formerly exempt charities and in respect of any period beginning before that day; or
b
which covers any period beginning before the appointed day and would extend to one or more formerly exempt charities.
2
The Charity Commission may, if it considers it appropriate to do so, instigate an inquiry under section 8 of the 1993 Act on or after the appointed day into a formerly exempt charity in respect of a matter—
a
arising before the appointed day but during the current financial year of the charity; and
b
of which it becomes aware on or after the appointed day.
Costs of a formerly exempt charity in promoting a Bill before Parliament11
Where immediately before the appointed day a formerly exempt charity was preparing or promoting a Bill in Parliament, section 17(7) of the 1993 Act continues to apply in respect of any expenditure incurred on or after that day in the preparation or promotion of that Bill as if the relevant charity remained an exempt charity.
Ongoing charity proceedings relating to a formerly exempt charity12
1
Any charity proceedings —
a
relating to a formerly exempt charity; and
b
taken before the appointed day,
continue on or after that day as if they had been authorised by the Charity Commission.
2
In this paragraph “charity proceedings” has the meaning given by section 33(8) of the 1993 Act.
Need for an order under section 36 of the 1993 Act in relation to a formerly exempt charity13
1
Nothing in section 36 of the 1993 Act applies to a disposition of land held by or in trust for a formerly exempt charity to which sub-paragraph (2) applies.
2
This sub-paragraph applies to a disposition of land held by or in trust for a formerly exempt charity if the charity trustees—
a
proposed that the relevant land be disposed of (whether by conveyance, transfer, lease or otherwise) before the appointed day; but
b
the relevant disposition had not been effected before that day.
Need for an order under section 38 of the 1993 Act in relation to a formerly exempt charity14
1
Nothing in section 38 of the 1993 Act applies to a mortgage of land held by or in trust for a formerly exempt charity to which sub-paragraph (2) applies.
2
This sub-paragraph applies to a mortgage of land held by or in trust for a formerly exempt charity if the charity trustees—
a
proposed that the mortgage be executed before the appointed day; but
b
had not executed it before that day.
3
For the purposes of sub-paragraph (2) it does not matter whether the mortgage—
a
will only have effect to secure the repayment of sums paid by way of the proposed loan or grant or discharge of a proposed obligation; or
b
will 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.
4
In this paragraph “mortgage” has the meaning given by section 38 of the 1993 Act.
Persons acting as charity trustee of or trustee for a formerly exempt charity while disqualified15
1
The Commission may not make any order under section 73(4) of the 1993 Act which would require a person (“P”) to—
a
repay to a formerly exempt charity the whole or part of any relevant sums received by P by way of remuneration or expenses; or
b
pay to that charity the whole or part of the monetary value of any relevant benefit in kind received by P.
2
For the purposes of this paragraph—
a
a sum by way of remuneration or expenses or a benefit in kind received by P is a relevant sum or benefit in kind if it is received by P in connection with P’s acting as charity trustee of or trustee for the formerly exempt charity at any time—
i
before the appointed day; and
ii
when P was disqualified by section 72 of the 1993 Act for acting as such a trustee;
b
it does not matter whether—
i
the sums received by P by way of remuneration or expenses are; or
ii
the benefit in kind received by P is,
received by P before, on or after the appointed day.
PART 3GENERAL
Effect of changes to exempt charity status16
1
The commencement of this Order—
a
does not affect—
i
any proceedings brought in any court or to the Tribunal in respect of any decision, order or direction made or any other matter arising before the appointed day;
ii
any order made or judgment given in any proceedings mentioned in sub-paragraph (i) whether that order is made or judgment given before, on or after the appointed day;
b
does not affect the validity of anything done before the appointed day on the basis that—
i
a formerly exempt charity was an exempt charity; or
ii
a new exempt charity was not an exempt charity;
c
does not require—
i
any formerly exempt charity to be treated as not having been an exempt charity;
ii
any new exempt charity to be treated as having been an exempt charity,
at any time before the appointed day.
2
In this paragraph “Tribunal” has the meaning given by section 97(1) of the 1993 Act17.
Exempt charity status of common deposit and common investment funds17
The 1993 Act has effect as if the reference in section 24(8) of that Act to “a scheme which admits only exempt charities” were a reference to a scheme which admits—
a
only exempt charities;
b
only exempt charities and formerly exempt charities; or
c
only formerly exempt charities.
PART 4INTERPRETATION
Interpretation18
In this Schedule—
a
“appointed day” means the day appointed for the commencement of section 11(3) of the Charities Act 2006;
b
“current financial year” means, in relation to a charity, a financial year which—
i
began before the appointed day; but
ii
ends on or after that day;
c
“financial year” has the meaning given by section 97(1) of the 1993 Act;
d
“formerly exempt charity” means a charity which—
i
ceased to be an exempt charity, on the appointed day, or
ii
is one of a particular description of charities which ceased to be exempt charities on that day,
by virtue of a provision of this Order;
e
“new exempt charity” means a charity which becomes an exempt charity, on or after the appointed day, by virtue of article 2(7) of this Order;
f
“principal regulator” has, in relation to an exempt charity, the meaning given by section 13 of the Charities Act 2006.