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Property Handbook

 

WARNING:
The entire content of this Property Handbook has been prepared by members of PLATO. It has been carefully checked, but its accuracy cannot be guaranteed, neither at the date of preparation nor when viewed or printed. Accordingly, neither the members of PLATO nor the United Reformed Church can accept responsibility for the accuracy of the information the handbook contains.

 

The Charities Act 1993

 

621

 

This is a significant piece of legislation, which repeals and replaces most of the Charities Act 1960, which was previously the principal source of charity law. It should be emphasised that the Act does not apply to Scotland. The three main elements of the new Act that concern churches are considered below.
 

Registration
 

There is a general requirement to register and file annual returns and accounts with the Charity Commission for England and Wales. Churches are, however, excepted from this requirement by the Charities (Exception from Registration) (Amendment) Regulations 2002. For them, registration is optional. Excepted charities do, nevertheless, retain their status as charitable organisations. The Government is currently reviewing this exception, and the Charities Bill introduced into Parliament in May 2004 anticipates that all excepted charities will eventually have to register. (Initially only larger churches, or those engaged in major building projects, with annual income above £100,000 would have to register, but eventually all churches with income above £5,000 would be registered. “Small charities” would not be registerable, but would retain charity status for tax purposes. It now looks unlikely that any form of “group” registration will be allowed for through the United Reformed Church nationally.)
 

New accounting requirements
 

The latest Statement of Recommended Practice (SORP) applies to all accounting periods commencing after 1 January 2001. The rules affect large charities much more than small ones, and build on the earlier SORP, details of which were circulated to all church treasurers by the URC Finance Department. Further advice on these rules may be obtained from your Synod Office or from your District Treasurer. (A revised SORP tends to be produced every five years, and a new one is proposed which will apply to all accounting periods commencing after 1 March 2005.) Information is also obtainable from the Charity Commission (by telephone on: 0870-333 0123, or on their website: http://www.charitycommission.gov.uk/ ).

  • In particular the following leaflets may be of interest:

  • CC60 The Hallmarks of a Well-run Charity

  • CC61 Charity Accounts 2001: The Framework

  • CC62 Charities SORP 2000: What has Changed

  • CC63 Independent Examination of Accounts under SORP 2000: Directions and Guidance Notes

  • CC64 SORP 2000: Receipts and Payments Accounts Pack

  • CC65 SORP 2000: Accruals Accounts Pack

  • CC66 SORP 2000: Example Reports and Accounts

  • SORP 2000: Accounting and Reporting by Charities: Statement of Recommended Practice

Procedures
 

* Some of these provisions apply differently to Northern Synod.

There is a requirement on trustees to follow specific procedures when disposing of property or entering certain leases.

Only Part V of the Charities Act 1993 relates to Charity Land. Section 36 contains rules that should be followed prior to agreeing to sell or lease land or buildings belonging to the church.* The trustees should:

  • Obtain and consider a written report from a qualified surveyor, advising on the best way to achieve a sale and on the best terms reasonably obtainable. (For leases of fewer than 7 years, the advisor need not be a qualified surveyor)

  • Follow the surveyor’s advice in respect of marketing the proposed sale

  • Give public notice and consider representations if the land or buildings are to be sold and not replaced (or leased for more than 2 years)

  • Seek the permission of the Charity Commission if the church intends to sell to a “connected person”, such as a trustee, or officer, or any of their close relatives

There are also rules requiring trustees to take advice before taking out a mortgage on church land or buildings.

This is just a summary of the legal requirements. For full details, you should consult the Act itself (which may be viewed at www.legislation.hmso.gov.uk) or contact your Synod Office.

 



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