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Parish Council Asset Disposal Form requirement for charitable land

0 votes
A Parish Council has charitable assets listed on its asset register at their full value.  This is a mistake, as the council is the custodian trustee and only holds them in trust.  To correct this they have been advised to complete an asset disposal form for each asset.  I am not sure this is the correct thing to do, as they did not own the asset so cannot dispose of it, and they still hold it in trust, as they have since 1920.  Any thoughts on the matter?
by (2.1k points)

2 Answers

0 votes
As a first step, I would ask the person who has given this advice to explain on what basis said advice has been given.
by (5.2k points)
John  - thanks, we will but collecting background information first.  I would imagine there needs to be a paper trail when a PV asset value drops dramatically, but a disposal does not sound right.
Recording asset value is different for PC than you might recognise from a business balance sheet where asset depreciation is shown year on year.
In PC accounts it is usual to NOT show depreciation which can seem odd to anyone with a business background.
From memory - I recall this being explained in the practitioners guide but I don’t recall the detail off top of my head.
I think it did change in the latest edition though - previous edition said don’t depreciate, current edition says you can but if you do it must be applied equitably across all assets.
I might be veering a bit off topic here but it may prove useful?

You’d have to look up the current and previous iteration of the Joint Practitionrrs Guide.

para 5.56 might give some useful background detail.
Round again - thanks ...We worked with the council on this, as it took a while for it to understand it was a custodian trustee.  The councils own procedures say that property held in trust should be on the asset register with zero value.  A point used by the internal auditor in their risk report to the council -  once brought to their attention.
0 votes

It might prove useful to start a discussion with Fields in Trust.

They exist for exactly these types of situation. 

It might prove beneficial to engage FiT to take on the land - depending on any covenants of the original deeds - but this is EXACTLY what FiT “do.”

by (8.2k points)
Round Again - Thanks.  The land was gifted to the village as a charitable trust in 1920.  So its designated land (the objects are as per the recreation ground act 1859) held in trust by the PC as custodian trustee -  and should be managed by the Committee of Management.  Unfortunately not all this was fully understood over the years (the PC has its office in the middle of it) so its being put to rights slowly by the trustees.  The PC did sign a deed of dedication (non charitable) with FIT in 2019 thinking they owned the land.  That is taking a bit of work to unwind, as the Parish Council do not own the land they disposed of!
We have a similar situation involving a building. The Councillors as Trustees guided by the Clerk have decided its easier to remove Charity Status as too much Precept monies have been spent on it and will be easier in the future to dispose of.
Charlies - Good Luck!  The charity Commission is not happy to remove charitable status, although a lot depends on what it says in the constitution / Indenture.  If there is no need for the building then it is a bit easier of course.  The consultation will be interesting.

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