Office of Public Sector Information
PART I continued
(4) Subject to subsection (5) below, an application for approval of a scheme under this section shall be made to the Court of Session.
(5) From such day as the Lord Advocate may, by order, appoint, an application for approval of a scheme under this section may be made by a public trust having an annual income not exceeding such amount as the Secretary of State may, by order, prescribe—
(a) to the sheriff for the place with which the trust has its closest and most real connection;
(b) where there is no such place as is mentioned in paragraph (a) above, to the sheriff for the place where any of the trustees resides;
(c) where neither paragraph (a) nor (b) above applies, to the sheriff of Lothian and Borders at Edinburgh.
(6) Every application under this section shall be intimated to the Lord Advocate who shall be entitled to enter appearance as a party in any proceedings on such application, and he may lead such proof and enter such pleas as he thinks fit; and no expenses shall be claimable by or against the Lord Advocate in any proceedings in which he has entered appearance under this subsection.
(7) This section shall be without prejudice to the power of the Court of Session to approve a cy pres scheme in relation to any public trust.
(1) Where a majority of the trustees of any public trust having an annual income not exceeding £5,000 are of the opinion—
(a) that the purposes of the trust, whether in whole or in part—
(i) have been fulfilled as far as it is possible to do so; or
(ii) can no longer be given effect to, whether in accordance with the directions or spirit of the trust deed or other document constituting the trust or otherwise;
(b) that the purposes of the trust provide a use for only part of the property available under the trust;
(c) that the purposes of the trust were expressed by reference to—
(i) an area which has, since the trust was constituted, ceased to have effect for the purpose described expressly or by implication in the trust deed or other document constituting the trust; or
(ii) a class of persons or area which has ceased to be suitable or appropriate, having regard to the spirit of the trust deed or other document constituting the trust, or as regards which it has ceased to be practicable to administer the property available under the trust; or
(d) that the purposes of the trust, whether in whole or in part, have, since the trust was constituted—
(i) been adequately provided for by other means; or
(ii) ceased to be such as would enable the trust to become a recognised body; or
(iii) ceased in any other way to provide a suitable and effective method of using the property available under the trust, having regard to the spirit of the trust deed or other document constituting the trust,
subsection (2) below shall apply in respect of the trust.
(2) Where this subsection applies in respect of a trust, the trustees may determine that, to enable the resources of the trust to be applied to better effect consistently with the spirit of the trust deed or other document constituting the trust—
(a) a modification of the trust’s purposes should be made;
(b) the whole assets of the trust should be transferred to another public trust; or
(c) that the trust should be amalgamated with one or more public trusts.
(3) Where the trustees of a trust determine as mentioned in subsection (2)(a) above, they may, subject to subsections (4) to (6) below, pass a resolution that the trust deed be modified by replacing the trust purposes by other purposes specified in the resolution.
(4) The trustees shall ensure that, so far as is practicable in the circumstances, the purposes so specified are not so far dissimilar in character to those of the purposes set out in the original trust deed or other document constituting the trust that such modification of the trust deed would constitute an unreasonable departure from the spirit of such trust deed or other document.
(5) Before passing a resolution under subsection (3) above the trustees shall have regard—
(a) where the trust purposes relate to a particular locality, to the circumstances of the locality; and
(b) to the extent to which it may be desirable to achieve economy by amalgamating two or more trusts.
(6) As regards a trust which is a recognised body, the trustees shall ensure that the purposes specified as mentioned in subsection (3) above are such as will enable the trust to continue to be granted an exemption from tax by the Commissioners of Inland Revenue under section 505(1) of the [1988 c. 1.] Income and Corporation Taxes Act 1988 (exemption from tax for charities).
(7) Subject to subsection (14) below, a modification of trust purposes under this section shall not have effect before the expiry of a period of two months commencing with the date on which any advertisement in pursuance of regulations made under subsection (13) below is first published.
(8) Where the trustees determine as mentioned in subsection (2)(b) above they may pass a resolution that the trust be wound up and that the assets of the trust be transferred to another trust or trusts the purposes of which are not so dissimilar in character to those of the trust to be wound up as to constitute an unreasonable departure from the spirit of the trust deed or other document constituting the trust to be wound up.
(9) Before passing a resolution under subsection (8) above, the trustees shall—
(a) where the trust purposes relate to a particular locality, have regard to the circumstances of the locality;
(b) where the trust is a recognised body, ensure that the purposes of the trust to which it is proposed that the assets be transferred are such as will enable the trust to be granted an exemption from tax by the Commissioners of Inland Revenue under section 505(1) of the Income and Corporation Taxes Act 1988 (exemption from tax for charities); and
(c) ascertain that the trustees of the trust to which it is proposed to transfer the assets will consent to the transfer of the assets.
(10) Where the trustees determine as mentioned in subsection (2)(c) above, they may pass a resolution that the trust be amalgamated with one or more other trusts so that the purposes of the trust constituted by such amalgamation will not be so dissimilar in character to those of the trust to which the resolution relates as to constitute an unreasonable departure from the spirit of the trust deed or other document constituting the last mentioned trust.
(11) Before passing a resolution under subsection (10) above, the trustees shall—
(a) where the trust purposes relate to a particular locality, have regard to the circumstances of the locality;
(b) where any of the trusts to be amalgamated is a recognised body, ensure that the trust purposes of the trust to be constituted by such amalgamation will be such as to enable it to be granted an exemption from tax by the Commissioners of Inland Revenue under section 505(1) of the [1988 c. 1.] Income and Corporation Taxes Act 1988 (exemption from tax for charities); and
(c) ascertain that the trustees of any other trust with which it is proposed that the trust will be amalgamated will agree to such amalgamation.
(12) Subject to subsection (14) below, a transfer of trust assets or an amalgamation of two or more trusts under this section shall not be effected before the expiry of a period of two months commencing with the date on which any advertisement in pursuance of regulations made under subsection (13) below is first published.
(13) The Secretary of State may, by regulations, prescribe the procedure to be followed by trustees following upon a resolution passed under subsection (3), (8) or (10) above, and such regulations may, without prejudice to the generality, include provision as to advertisement of the proposed modification or winding up, the making of objections by persons with an interest in the purposes of the trust, notification to the Lord Advocate of the terms of the resolution and the time within which anything requires to be done.
(14) If it appears to the Lord Advocate, whether in consideration of any objections made in pursuance of regulations made under subsection (13) above or otherwise—
(a) that the trust deed should not be modified as mentioned in subsection (3) above;
(b) that the trust should not be wound up as mentioned in subsection (8) above; or
(c) that the trust should not be amalgamated as mentioned in subsection (10) above,
he may direct the trust not to proceed with the modification or, as the case may be winding up and transfer of funds or amalgamation.
(15) The Secretary of State may, by order, amend subsection (1) above by substituting a different figure for the figure, for the time being, mentioned in that subsection.
(16) This section shall apply to any trust to which section 223 of the [1973 c. 65.] Local Government (Scotland) Act 1973 (property held on trust by local authorities) applies.
(1) This section applies to any public trust which has an annual income not exceeding £1,000 where the trust deed or other document constituting the trust prohibits the expenditure of any of the trust capital.
(2) In the case of any trust to which this section applies where the trustees—
(a) have resolved unanimously that, having regard to the purposes of the trust, the income of the trust is too small to enable the purposes of the trust to be achieved; and
(b) are satisfied that either there is no reasonable prospect of effecting a transfer of the trust’s assets under section 10 of this Act or that the expenditure of capital is more likely to achieve the purposes of the trust,
they may, subject to subsection (3) below, proceed with the expenditure of capital.
(3) Not less than two months before proceeding to expend capital, the trustees shall advertise their intention to do so in accordance with regulations made by the Secretary of State and shall notify the Lord Advocate of such intention.
(4) If it appears to the Lord Advocate that there are insufficient grounds for the expenditure of capital he may apply to the court for an order prohibiting such expenditure, and if the court is satisfied that there are such insufficient grounds it may grant the order.
(5) The Secretary of State may, by order, amend subsection (1) above by substituting a different figure for the figure, for the time being, mentioned in that subsection.
(1) The Secretary of State may appoint a person to be the Scottish charities nominee (in this section referred to as “the nominee”) who shall have the functions conferred by this section.
(2) Where the nominee receives from a relevant institution the following information—
(a) that every account held by the institution in the name of or on behalf of a named body is dormant; and
(b) the amount of the balance standing to the credit of the body in each such account,
and he is satisfied that the body is a recognised body, subsection (3) or, as the case may be, subsection (5) below shall apply as regards the body and such accounts.
(3) Where the aggregate amount standing to the credit of the body in such accounts as are mentioned in subsection (2) above does not exceed £5,000, unless it appears to the nominee—
(a) that a person is concerned in the management or control of the body; or
(b) that there are circumstances relating to the body which would make it inappropriate to do so,
he shall transfer the balance standing to the credit of the body in such accounts to such other recognised body as he may determine, having regard to the purposes of the body in whose name or on whose behalf the accounts are held and those of the body to which it is proposed to transfer the funds; and the body to which the funds are transferred under this subsection or subsection (4) below shall be entitled to apply such funds for its purposes as it thinks fit.
(4) Where, in the case of a body to which subsection (3) above applies, the nominee is unable to ascertain the purposes of the body in whose name or on whose behalf such accounts are held, he shall transfer the balance standing in the name of the body concerned to such other recognised body as appears to him expedient.
(5) Where the aggregate amount standing to the credit of the body in such accounts as are mentioned in subsection (2) above exceeds £5,000 or in any case to which paragraphs (a) or (b) of subsection (3) above applies, the nominee shall advise the Lord Advocate of the information received by him in respect of the body and of any other matter which appears to him to be relevant in the circumstances.
(6) Where the Lord Advocate receives information in pursuance of subsection (5) above he shall inform the nominee—
(a) in the case of a body which is a trust, whether he intends to exercise his power under section 13(2) of this Act to appoint new trustees to the body; or
(b) in any case, if he intends to apply to the Court of Session for the appointment of an interim judicial factor under section 7(4)(c) of this Act,
but if the Lord Advocate informs the nominee that he does not intend to proceed under either paragraph (a) or (b) above, subsection (3) above shall apply as regards the body and such accounts as are mentioned in subsection (2) above as if the aggregate amount of the balance referred to in subsection (3) did not exceed £5,000 and neither paragraph (a) nor (b) of that subsection applied.
(7) Notwithstanding anything in any enactment or rule of law to the contrary, the nominee shall, by virtue of this subsection, have the right to effect any transaction (including a transaction closing the account) in relation to any account to which subsection (3) above applies; and the receipt of the nominee in respect of any funds withdrawn or transferred from an account by virtue of this subsection shall, as regards the interest of the nominee in respect of such funds, be a full and valid discharge to the relevant institution holding the account.
(8) No liability (other than liability for a criminal offence) shall attach to the nominee in consequence of any act or omission of his in the performance of his functions under this section.
(9) The power of the nominee to effect transactions in relation to the accounts of a body shall cease to have effect—
(a) when the Lord Advocate notifies him of his intention to proceed under subsection (6) above;
(b) if the relevant institution by which the accounts are held notifies the nominee that the accounts held by or on behalf of the body are no longer dormant; or
(c) where the nominee becomes aware of the identity of a person concerned in the management or control of the body, when he informs the institution of that fact,
and in any case to which paragraph (c) above applies, the nominee shall also inform the Lord Advocate of that fact.
(10) The Secretary of State may, by regulations made under this section—
(a) make provision as to the procedure to be followed by the nominee in exercising his powers under this section;
(b) require the nominee to make to the Secretary of State an annual report as regards the exercise of his functions and such regulations may specify the form and content of such report; and the Secretary of State shall lay a copy of such report before each House of Parliament;
(c) prescribe the circumstances in which and the extent to which the nominee may apply any interest accruing to any account as regards which subsection (3) above applies during any period for which he is entitled to effect transactions in respect of the account for the purpose of defraying his expenses in connection with the exercise of his functions under this section;
(d) require the nominee to keep accounts as regards his outlays and expenses in connection with the exercise of his functions under this section; and
(e) amend subsections (3) and (5) above by substituting a different figure for the figure for the time being mentioned in those subsections.
(11) Where every account held by or on behalf of a body which appears to a relevant institution to be a recognised body is a dormant account, no obligation of confidentiality or requirement of secrecy (whether imposed by any enactment or rule of law or otherwise) shall prevent the institution from supplying to the nominee information such as is mentioned in subsection (12) below.
(12) Information referred to in subsection (11) above is information relating to any account such as is mentioned in that subsection which consists of any of the following—
(a) the amount of the balance of the account as at the date the information is supplied;
(b) the last date on which a transaction (other than a transaction consisting only of the accrual of interest to the account) was effected in relation to the account;
(c) so far as is known to the institution, the terms of the trust deed or other document constituting the body or any information as to the nature of the purposes of the body.
(13) For the purpose of this section—
(a) a “relevant institution” is—
(i) an institution which is authorised by the Bank of England to operate a deposit-taking business under Part I of the [1987 c. 22.] Banking Act 1987;
(ii) a building society which is authorised by the Building Societies Commission under section 9 of the [1986 c. 53.] Building Societies Act 1986 to raise money from its members;
(iii) such other institution mentioned in Schedule 2 to the [1987 c. 22.] Banking Act 1987 as the Secretary of State may, by regulations made under this section, prescribe;
(b) an account is dormant if—
(i) in the period of ten years preceding the date on which the institution reviews the account, no transaction (other than a transaction consisting only of the accrual of interest to the account) has taken place in respect of the account; and
(ii) the institution has no knowledge of the identity of any person concerned in the management or control of the body in whose name or on whose behalf the account is held.
(1) Where a recognised body is a trust, notwithstanding anything to the contrary in the trust deed or other document constituting the trust, the trustees shall have power to appoint such number of additional trustees as will secure that, at any time, the number of trustees shall be not less than three.
(2) Where in the case of any trust which is a recognised body—
(a) the number of trustees is less than three; and
(b) it appears to the Lord Advocate that the trustees will not, or are unable to, exercise their power under subsection (1) above,
if it appears to the Lord Advocate expedient to do so, he may exercise the power in place of the trustees.
(1) This section applies to a recognised body which may be wound up by the Court of Session under or by virtue of Parts IV or V of the [1986 c. 45.] Insolvency Act 1986.
(2) Where a body to which this section applies has power to alter the instruments establishing or regulating it, it shall not alter any charitable purposes in those instruments except in such a way as will enable the body to continue to be granted an exemption from tax by the Commissioners of Inland Revenue under section 505(1) of the [1988 c. 1.] Income and Corporation Taxes Act 1988 (exemption from tax of charities).
(3) Notwithstanding section 124 of the [1986 c. 45.] Insolvency Act 1986, a petition for the winding-up under section 122 of that Act of a body to which this section applies may be presented by the Lord Advocate to any court in Scotland having jurisdiction.
(1) In this Part of this Act—
“annual income” in relation to a recognised body means the income of the body for the financial year to which its most recent statement of accounts relates;
“accounting reference period”, “accounting reference date” and “financial year” shall be construed in accordance with subsections (2) to (7) below;
“body” includes the sole trustee of any trust and, as regards any reference in this Part of this Act to the institution of proceedings in any court or to any order of a court in relation to an unincorporated body, shall be construed—
(a) in the case of a trust, as a reference to the trustees acting in their capacity as such;
(b) in any other case, as a reference to the persons concerned in the management or control of the body;
“court”, for the purposes of establishing jurisdiction to hear or determine any matter other than under sections 7 and 9 of this Act, means the Court of Session or the sheriff court;
“non-recognised body” shall be construed in accordance with section 2 of this Act;
“non-registered charity” has the meaning given by section 6 of this Act;
“recognised body” has the meaning given by section 1 of this Act; and
“registered charity” has the meaning given by section 6 of this Act.
(2) For the purposes of this Part of this Act, a recognised body’s first financial year begins with the first day of its first accounting reference period and ends with the last day of that period or such other date, not more than 7 days before or after the end of that period, as the persons concerned with the management or control of the body may determine.
(3) Subject to subsection (4) below, subsequent financial years begin with the day immediately following the end of the body’s previous financial year and end with the last day of its next accounting reference period or such other date, not more than 7 days before or after the end of that period as the persons responsible for its management or control may determine.
(4) A recognised body’s accounting reference periods are determined according to its accounting reference date.
(5) A recognised body’s accounting reference date is the date upon which its accounting reference period ends in each calendar year and it shall be ascertained as follows—
(a) in the case of a body which is recognised at the commencement of this section and in respect of which accounts have been prepared up to a date not more than 12 months before such commencement, its accounting reference date shall be that date;
(b) in the case of a body which is recognised at the commencement of this section and in respect of which no such accounts have been prepared, its accounting reference date shall be 31 March or such other date as the Secretary of State may, by order, prescribe;
(c) in the case of a body which is not recognised at the commencement of this section and in respect of which accounts have been prepared up to a date not more than 12 months before its recognition, its accounting reference date shall be that date; and
(d) a body which is not recognised at the commencement of this section and in respect of which no accounts have been prepared up to a date not more than 12 months before such commencement, unless it determines that its accounting reference date shall be 31 March or such other date as the Secretary of State may, by order, prescribe, shall by notice given to the Lord Advocate specify its accounting reference date.
(6) A recognised body’s first accounting reference period is—
(a) in the case of a body which is recognised at the commencement of this section and in respect of which any accounts have been prepared for a period up to a date not more than 12 months before such commencement, the period beginning with that date;
(b) in the case of a body which is recognised at such commencement and in respect of which no such accounts have been prepared, the period beginning with such commencement;
(c) in the case of any other body, the period of more than 6 months, but not more than 18 months, beginning with the date from which its recognition takes effect and ending with its accounting reference date.
(7) Its subsequent accounting reference periods are successive periods of 12 months beginning immediately after the end of the previous accounting reference period and ending with its accounting reference date.
(8) A recognised body may, on giving not less than one month’s notice of its intention to do so to the Lord Advocate, unless the Lord Advocate notifies the body that he objects to the proposal, specify a new accounting reference date having effect in relation to the body’s current accounting reference period and subsequent periods.
(9) Nothing in this Part of this Act, except section 1, shall affect any educational endowment within the meaning of section 122(1) of the [1980 c. 44.] Education (Scotland) Act 1980.
(10) The [1940 c. 31.] War Charities Act 1940 shall cease to have effect as regards Scotland; but nothing in this subsection shall affect any prosecution for an offence under that Act which has been instituted before the commencement of this section.
(11) Any power in this Part of this Act of the Secretary of State to make regulations or orders shall be exercisable by statutory instrument subject to annulment in pursuance of a resolution of either House of Parliament.
Law Reform (Miscellaneous Provisions) (Scotland) Act 1990