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Charity Tribunal

Suspension or removal from membership

Remuneration of trustees

Extended power for the Charity Commission

Amending an unincorporated charity's objects

Amending a charitable company's memorandum and articles

Power to transfer all property

Charitable purposes

Public benefit test

Recreational Charities

A new independent tribunal now makes it possible to appeal against Charity Commission decisions without going to the High Court. In addition, the Commission or Attorney General can take questions of charity law to the tribunal. There are concerns that only wealthy charities will be able to use the tribunal.

Suspension or removal from membership

- 18 March 08

The Charity Commission are able to remove a person from membership of a charity. They also have the right under s.18 to suspend or remove from office a trustee, officer, agent or employee of a charity.

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A trustee or person connected with a trustee can be paid for services provided to a charity (but not for services as a trustee or employee) provided that:

• there is no express provision in the governing document prohibiting the relevant person from receiving the remuneration
• the trustees (excluding the trustee who would be paid or the person linked to them that is to be paid) decide it is in the interest of the charity for the services to be provided by that person, and agree the amount or a maximum amount to be paid
• before entering into the agreement, the trustees consider Charity Commission guidance on such payments
• the amount is not more than is reasonable for the provision of those services by that person
• the amount or maximum amount is then set out in a written agreement between the charity and the person
• only a minority of trustees are at any time entitled to remuneration under such agreements or other arrangements

The relevant trustees will be disqualified from acting as a trustee in relation to decisions or other matters about the decisions or other matters about the agreement. The Charity Commission will be able to require the trustee or connected person to repay remuneration or the value of any benefit in kind where the disqualification rule has not be followed.

A connected person is:

• A) a child, parent, grandchild, grandparent, brother or sister of the trustee
• B) the spouse or civil partner of the trustee or of any of the trustee's relatives listed in group A
• C) an institution which is controlled for a charity trustee or by any person falling within groups A and B; or
• D) a corporate body that anyone in the above groups has a substantial interest in.

The new powers coming into force on this date are:

• s.20 Power of the Commission to give specific directions for protection of charity property
• s.21 Power to direct application of charity property

Trustees of unincorporated charities with annual incomes of no more than £10,000 that do not hold land designated for specific purposes may amend their charitable objects by a two-third majority agreement.

The new purposes must be charitable and must include purposes similar to those being replaced. The trustees must be satisfied it is in the interests of the charity for their objects to be changed.

A copy of the resolution and the reasons for passing it must be sent to the Charity Commission.

Consent is only required for the following changes from 18 March:

• changes to the objects clause
• changes relating to use of property when the company is dissolved
• changes relating to the provision of benefit to directors
• members of the company or persons connected with them

Procedures for transferring property from a charity with an income of under £10,000 have been simplified. Charities will be able to transfer property to one or more charities unless they hold land that must be used for a specific purpose.

There are now 12 charitable purposes and a catch-all:

• prevention or relief of poverty
• advancement of education
• advancement of religion (regardless of belief in god or gods)
• advancement of health or the saving of lives
• advancement of citizenship or community development
• advancement of arts, culture, heritage or science
• advancement of amateur sports
• advancement of human rights, conflict resolution or reconciliation or the promotion of religious or racial harmony or equality or diversity
• advancement of environmental protection or improvement
• relief of those in need by reason of youth, age, ill health, disability, financial hardship or other disadvantage
• advancement of animal welfare
• promotion of the efficiency of the armed forces of the Crown, or the efficiency of the police, fire and rescue services or ambulance services
• other purposes currently recognised as charitable under charity law or s.1 of the Recreational Charities Act 1958, and any new purposes which are similar to another charitable purpose

Virtually all of these were already charitable, so the new provisions will make little difference to most existing charities.

Charities must show that the public benefit through their charitable purpose. The principles of public benefit are:

• that there must be identifiable benefit/s to the public that are clear; related to the charity's purpose; and balanced against any detriment or harm
• that the benefit must be felt by the public or a section of the public; that beneficiaries must be appropriate to the charitable purpose; that the ability to benefit must not be restricted unreasonably; that people in poverty must be able to access the benefit and that any private benefits must be small

Consultations are underway covering guidance on the public benefit test for specific types of charity. These should be concluded by Autumn 2008.

Special requirements for reporting

Recreational charities for men only are now charitable in the same way that recreational charities for the public or women only have been in the past.