Information provided by the Charities Commission in February 2007

Those who attended the Information Meeting held by the directors of the Anson Trust on 1st November last year may remember one of the directors explaining that if the Trust ran out of money then the assets owned by the Trust would have to be sold off and the proceeds of the sale would have to be returned to the nearest living relative of the Anson sisters. We were told that the sale of the field for development and providing alternative facilities to the North of the village was the "only practical solution".

The Charities Commission have confirmed that there is no such requirement for the assets administered by a failed Trust. An officer of the Charities Commission has explained tot us that while any land or property remains it must continue to be used for the benefit of the village.

Here is the precise wording of the question we posed to them:

I would be grateful if you could tell us exactly what the rules of the Charities Commission require in the event that a Private Charitable Trust has to be wound up through lack of liquid funds. We would be very grateful if you could supply us a copy of any relevant rules or provide reference to relevant legislation.

In this specific case the Trust in question is telling us that the Charities Commission will insist that its assets (approximately 7.5 acres of land and buildings in a state of some disrepair but currently used by the whole village as sports fields and community halls) will have to be sold off to the highest bidder and the money released from the sale must be given to the nearest living relative of the original benefactors. Moreover we have been lead to understand that the original wishes of the benefactors in setting up the trust are not considered relevant in this "wind up" process.

The following is from the email we received from them in reply:

The Commission has no specific rules for charity's winding up, in normal circumstances the trustees must follow the provisions detailed within the dissolution clause of the governing document. We would require sight of the minutes of the meeting held to dissolve the charity and a copy of the final accounts showing the distribution of the remaining assets and subsequent nil balance.

However, in this case the governing document does not have a dissolution clause, this is because the land described within the Scheme dated 10 May 2005 is specie land (land held on specific trusts). There is a power of sale contained within the governing document, and restrictions in place as to what the proceeds of sale may be used for.

I can confirm that the proceeds cannot be used in the way described in your email.

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