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1. |
Being satisfied that it is expedient in the interests of the charity that the trustees should have the power to do so, the Commissioners authorise the trustees of the charity to decide, at any time, and from time to time, subject to the directions set out below, but otherwise at their discretion, which part of the unapplied total return belonging to the charity should be held on trust for application (income) for the purposes of the charity. |
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"Investment return" means the return from investments which represent the assets given to the charity on a trust for investment (capital) and includes: |
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(a) |
any interest receivable; plus |
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(b) |
any net rent and other income or gains derived from the use or exploitation of assets; plus |
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(c) |
any dividends; plus |
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(d) |
all forms of capital gain resulting on, or from, the disposal, redemption, or revaluation of investment assets (including the issue or repayment of share or loan capital); less |
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(e) |
Any capital losses resulting on or from the disposal, redemption, or revaluation of investment assets. |
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"given to" includes any method of acquisition, other than investment return. |
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"Total return" means the whole of the investment return received by the charity, regardless of when it has arisen. |
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"Unapplied total return" means the total return less any part of the return which the trustees have previously applied for the purposes of the charity, or have previously allocated to the trust for application (income) for the purposes of the charity. |
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2. |
The Commissioners give the following directions as to matters connected with, or arising out of, the use of the power conferred by clause 1: |
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(1) |
When using that power, and when discharging the duties set out in sub-clauses (2) to (4) below, each of the trustees has a duty to exercise such care and skill as is reasonable in the circumstances, having regard in particular: |
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(a) |
as to any special knowledge, or experience that he or she has or holds himself or herself out as having, and |
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(b) |
if he or she acts as trustee in the course of a business or profession, to any special knowledge or experience that it is reasonable to expect of a person acting in the course of that kind of business or profession. |
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(2) |
The trustees shall identify and record, at the time when the power conferred by clause 1 is first used, which part of the existing assets of the charity represents its unapplied total return. |
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(3) |
The trustees shall only use the power conferred by clause 1 in such a way as not to prejudice the ability of the charity to meet the present and future needs which are designated by its trusts. |
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(4) |
(a) |
Before using that power, trustees must (unless the exception applies), obtain and consider proper advice about the way in which, having regard to the duty expressed in sub-clause (3), the power ought to be used. |
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(b) |
The exception is that trustees need not obtain such advice if they reasonably conclude that in all the circumstances it is unnecessary or inappropriate to do so. |
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(c) |
Proper advice is the advice of a person who is reasonably believed by the trustees to be qualified to give it by his or her ability in and practical experience of investment and actuarial matters relevant to the proper use of the power conferred by clause 1. |
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(5) |
When using the power conferred by clause 1, the trustees must act in accordance with such guidance given generally or specifically by the Commissioners. |
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(6) |
The trustees shall in their annual report* for each financial year: |
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(a) |
state the policy adopted by the trustees for making the identification required by sub-clause (2) above, and state the date from which the analysis required by that sub-clause was performed if different from the date when the charity was established; |
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(b) |
give an explanation of the consideration and policies relevant to the trustees' determination of the part of the unapplied total return that is allocated to the trust for application (income) in that financial year; |
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(c) |
identify the person(s) who provided the advice referred to in sub-clause (4) above. |
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* If the trustees of the charity concerned are not, or may not be, required to prepare an annual report, all this information should be provided in the notes to the charity's accounts in the relevant financial year, and the wording of sub-clauses (6) and (7) should be amended accordingly. |
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(7) |
The trustees shall, in notes to their accounts for each financial year, give particulars of: |
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(a) |
the aggregate value of the assets representing the unapplied total return at the beginning of the financial year; |
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(b) |
any increase or decrease during the year in the value of the assets representing the unapplied total return, |
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(c) |
the part of the unapplied total return which the trustees have, in the financial year, allocated to the trust for application (income) for the purposes of the charity; |
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(d) |
the aggregate value of the assets representing the unapplied total return at the balance sheet date. |
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(8) |
Whilst this Order remains in effect trustees shall not, after starting to use the power conferred by clause 1, use any other method of allocating the unapplied total return of the charity without the prior approval of the Commissioners. |
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3. |
(1) |
Unless the Commissioners otherwise direct, this order will cease to have effect on the day on which there comes into force any public general Act which: |
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(a) |
is not in force at the date of this Order, and which |
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(b) |
does, or would, but for this Order, impose duties on the trustees of the charity with respect to the allocation of the unapplied total return corresponding to those duties for which this Order makes provision. |
