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Legal update 2011 2012
Legal update 2011 2012
Legal update 2011 2012
Legal update 2011 2012
Legal update 2011 2012
Legal update 2011 2012
Legal update 2011 2012
Legal update 2011 2012
Legal update 2011 2012
Legal update 2011 2012
Legal update 2011 2012
Legal update 2011 2012
Legal update 2011 2012
Legal update 2011 2012
Legal update 2011 2012
Legal update 2011 2012
Legal update 2011 2012
Legal update 2011 2012
Legal update 2011 2012
Legal update 2011 2012
Legal update 2011 2012
Legal update 2011 2012
Legal update 2011 2012
Legal update 2011 2012
Legal update 2011 2012
Legal update 2011 2012
Legal update 2011 2012
Legal update 2011 2012
Legal update 2011 2012
Legal update 2011 2012
Legal update 2011 2012
Legal update 2011 2012
Legal update 2011 2012
Legal update 2011 2012
Legal update 2011 2012
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Legal update 2011 2012

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A round-up of recent law changes relevant to charities, including the Charities Act 2011.

A round-up of recent law changes relevant to charities, including the Charities Act 2011.

Published in: Business, Travel, Technology
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  • 1. Legal Update 2011-2012Giselle Davies, Partner &Gemma Lewis, Senior AssociateWednesday 16th May 2012
  • 2. Legal update• Regulation• Risk• Public benefit• The future
  • 3. Regulation• Charities Act 2011• Changes to Charity registration• HMRC – What’s new?• Charity Commission – What’s new?
  • 4. Charities Act 2011• Consolidating Act• Replaces: • Recreational Charities Act 1958 • Charities Act 1992 • Charities Act 1993 • Charities Act 2006• Royal Assent 14/12/11• In force 14th March 2012• Runs into 358 sections and 11 schedules
  • 5. Charities Act 2011In a nutshell….• Nothing changes except section / Act references• If not yet in force from Charities Act 2006 – still not in force
  • 6. Charities Act 2011So what……..?A few timely reminders:• “Registered Charity” statement• Land transactions• Authority to execute
  • 7. Charities Act 2011“Registered Charity” Statement requirement• Was s.5 Charities Act 1993 - now s.39 Charities Act 2011• Charities with income over £10,000• Applies to: • Notices, adverts, documents if soliciting money • Cheques, purchase orders etc • Bills, invoices, receipts, credit notes• Fine for person authorising issue without statement
  • 8. Charities Act 2011Land Transactions• Was s.36-39 1993 Act - Now s.117-126 2011 Act• Restrictions on dispositions – may require consent or if not Charity Trustees MUST take advice• Special documentation requirements• Who signs what – “charity” is different from “charity trustees”
  • 9. Charities Act 2011Land transactions – document requirements• Acquisition by charity • Statement• Disposal by charity & mortgage / charge by charity • Statement & Certificate of Charity Trusteesof “interest in land” freehold or leasehold or other”
  • 10. Charities Act 2011Statutory Authority for execution on behalf ofcharity trustees• Was s.82 1993 Act• Now s.333 2011 Act• May delegate to at least two of their number
  • 11. Changes to Charity Registration• Requirement to register (previously exempt / excepted)• Registration process: • Online • All documentation to be provided at outset
  • 12. HM Revenue & CustomsWhat’s new?• Implementation of F.A. 2010 definition of “charity” for all taxes purposes 1/4/12• Changes to wording of Gift Aid declarations• Other Gift Aid changes
  • 13. Definition of Charity for tax purposes• Jurisdiction condition• Registration condition• Management condition (“fit and proper persons test”)
  • 14. Requirement to register with HMRC• Complete ChA1• Changes to charity or managers – complete ChV1• Declaration – sign and retainwww.hmrc.gov.uk/charities/tax/recognition.htmHelpline: 0845 3020203
  • 15. Gift Aid declarations• New model declarations published 24/2/12• Claims based on “old” wording accepted until 31/12/12• Must say donor will pay income / capital gains tax at least equal to the amount of tax that all charities / CASCs they donated to will reclaim that year
  • 16. Other Gift Aid changes• £50,000 donation cap• Small donations bill
  • 17. Charity CommissionWhat’s new?• Risk Framework• Strategic Review• New / updated Guidance
  • 18. Risk• Greatest Risk – Loss of income • A False Economy Study • Acevo • London Voluntary Service Council • NCVO • Charity Commission
  • 19. RiskGreatest Risk – Loss of income • Charity Commission • The National Association of Voluntary and Community Action • A NCVYS Survey • Decline in family foundation funding • The Charity Market Monitor 2011 • Increase in the challenging of legacies
  • 20. Risk – loss of income• Find new funds – Oxfam Charity shops success• Incorporate/collaborate/merge• Survive
  • 21. Other risk issues• The pensions time bomb – £800 million charity pension deficit • Charity Finance Magazine May 2012 • Wedgwood Museum Trust• The Great Rate Escape debate
  • 22. Rates - Why worry about them?• Not new tax• No change in lawBut…• Charity Commission alert December 2011
  • 23. Rates – Why controversial now?Credit Crunch• Vacant properties• Landlords don’t want to pay rates• Charity relief makes Charity occupation attractive• Charity commission investigation into 700 cases
  • 24. Rates – the financial dilemma• “non domestic rates”• Commercial not domestic tax• Administered by local authority• Rateable value x multiplier• £10,000 x 42p = £4,200 per annum
  • 25. Rates - Can you escape?• Charitable relief • 80% mandatory relief • 20% discretionary relief• Hardship relief
  • 26. Rates - What relief will be awarded?• Not automatic, must apply• Need to show: • established for charitable purposes • used wholly or mainly for “Charitable purposes” • registered charity number good evidence • charitable purposes can be problematic• Other issues such as mixed use
  • 27. Issues to consider• Mixed use properties• Use of trading subsidiary• Charity Shops – specific relief• Trading by beneficiaries • Sale of goods by beneficiaries • Sale of goods made by beneficiaries
  • 28. Rates relief - Too good to be true?• After 3 months vacant property rated• Expensive for landlords• Landlord “inducements” • Willing Charity can relieve liability • Good business or tax evasion?
  • 29. Rates - Risk to Charity• Loss of relief• Can the Charity afford rates and rent?• Reputation Risk• What to do if offered a deal
  • 30. Rates - Protect yourself• Genuine need to occupy• Charity Commission recommendations• Break Clause• Take advice – rating surveyor• Full trustee minutes
  • 31. Public benefitThe “Independent Schools” case• The Charities Act 2006• Guidance published by the Charity Commission after the Charities Act 2006• Challenged by the Independent Schools Council• 14 October 2011 – Decision of the Upper Tribunal (Tax and Chancery Chamber)• Wider Implications of the Tribunal’s decision• Charity Commissions’ Current Position
  • 32. Public benefitThe “relief of Poverty/restricted class of beneficiaries” case• Charities Act 2006 • Prevention or relief of poverty• AG’s second charity law reference• Outcome – restricted class is acceptable
  • 33. The future• Review of the Charities Act 2006• Public benefit consultations• Implementation of further parts of Charities Act 2006 (now in Charities Act 2011)
  • 34. Thank YouCardiff Derby Nottingham
  • 35. Contact Details Giselle Davies DD : 029 2039 1797 giselle.davies@geldards.com Gemma Lewis DD : 029 2039 1877 gemma.lewis@geldards.com

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