Charity law update and Q&A for advisors

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From the Wales Charity Law and Governance Conference 2014.

Published in: Government & Nonprofit
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Charity law update and Q&A for advisors

  1. 1. Charity Law Update & Q & A Session for Advisors Giselle Davies Partner, Geldards LLP
  2. 2. Charity Law Update • CIO Implementation • Registration issues • Transfers from Local Authorities • Charities & Government Policy • Sector round-up / recent highlights
  3. 3. CIO Implementation • Legislation progress? • Practical acceptance? Yes - Creation of new charities Yes - Creation for “incorporation” Yes - No minimal income limits No - Conversions from companies or I & P Societies Yes - Used for most new start ups now, unless good reason for CLG
  4. 4. Registration Issues • Post “Cup Trust”: - Harder to register - More focus on Public Benefit information - More follow up questions - Evidence required - Reasons to say “no” rather than say “yes” - Private benefit - Relationship with individual or corporate sponsor
  5. 5. Transfer from Local Authorities • Watch out for: - LA control - Trustee conflicts of interest / loyalty - Pension issues relating to staff transfers - Ownership of buildings – risks
  6. 6. Charities & Government Policy E.g. Climate change reduction; waste recycling; ethnic minority participation; voluntary sector skills; encouragement of social enterprise •Watch out for: - Independence issues - Political neutrality - Risk transfer from funder - Unrecorded instructions / changes to grant schemes - Lack of adequate supervision / reporting requirements
  7. 7. Sector Round Up • Learning lessons from Dove Trust • Recent Tribunal / Court / CC decisions • Continuing need for mergers • Social investment matters • Treasury consultation • Annual return changes
  8. 8. Dove Trust / Charity Giving Website • In administration • Decision on distribution of remaining funds • Lessons: - Who is the contract with? - Read the small print - Ensure early transfers of funds - Check the safeguards/insurance
  9. 9. Tribunal / Court decisions • Bath Recreation Ground - Still ongoing after 15 years - Main issues – use by public v use by Bath RFC & control by LA - Will permission for further appeal be granted?
  10. 10. Regentford Limited • When has charity ceased to operate? - Reinstated to Register of Companies but - No charitable activities - CC right to refuse to remove from register
  11. 11. Appeals against CC decisions Colman v CC •Former trustee •No standing at Tribunal •Same as any other member of public
  12. 12. CC Inquiries • Double Defaulters - Class Inquiry for non-filers of accounts • Other themes - Governance - Management & administration - Financial Management - Overseas work - Purchase / use of property - Fundraising - “faith” charities
  13. 13. Need for Mergers • Worsening economic position for charities • Local authority reorganisation • Geographical / Cross sector commissioning
  14. 14. Social Investment • By charities – Law Commission Consultation on need for new statutory power (to 18/06/14) • By “investors” – Social Investment Tax Relief
  15. 15. HMRC / Treasury Consultation (Results awaited) •Aim to avoid another “Cup Trust” But: •Donations to charity attract tax relief •How to balance need for caution but avoid discouraging genuine philanthropy?
  16. 16. Annual Return Changes • New questions: - Raise funds from public? - Trading subsidiary? - Payment to trustees - Policies in place? - Another regulator? - Make grants predominantly?
  17. 17. Your questions…
  18. 18. Thank You
  19. 19. Contact details Giselle Davies DD: 029 2039 1797 M: 07918 651 663 E: giselle.davies@geldards.com

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