Sole Trustees

0 votes
Any suggestions on how to separate Council and Trustee hats? It looks like our local Councillors can't and are trying to take the easy option and spend thousands trying to remove the  charitable status.
asked by (240 points)

1 Answer

0 votes
Could you explain what you mean by "remove the charitable status"?  Is this in relation to a village hall?
answered by (5k points)
Yes, it's been discovered that the 1960s extension is not part of the building entrusted. I'm not sure how they plan to separate it as it's the bar, toilets, kitchen and changing/meeting rooms rendering the hall useless without.
So the two parts of the building have different owners, with one part held by the council as a trustee of a charity?  Is that correct?  Who owns the other part?
The Council, and have recently discovered that they own the land. I presume that is why it's easier to have the Charity status removed. The footprint is a valuable piece of land. In the meantime they are trying to cover the council's costs by running the bar. It has been suggested then this would brings into question business rates.
You (they?) need to take specialist advice here, by which I don't mean a solicitor.  There are a small number of specialist solicitors working exclusively on complex charity matters, but there would be a five-figure bill to pay if you use them.  A general solicitor is unlikely to have sufficient expertise to deal with this.  As a starting point, speak to your local Rural Community Council, who you'll find from the ACRE website acre.org.uk.  They publish legal guidance notes on many of the issues you have mentioned and have access to free sources of advice.

As a general rule, a non-charitable body cannot receive charity assets, so removing the charity status to transfer the property to the council is not an option.  If the council is the registered title holder, is that title absolute, or do they hold it on behalf of the charity?  A Land Registry title search should clarify that, if the property is registered (village halls and public land often aren't).  If the charity is to be wound up, its governing document will contain a dissolution clause specifying what must happen to the assets, which will probably be something along the lines of "distribute to other charitable bodies in the local area".  The council isn't a charitable body.

You are right to mention the issue of the management of the bar, as this raises numerous questions regarding licencing, trading, taxes, accounting, insurance etc.  It all sounds a bit of a mess and those involved should tread carefully.  The Local Government Association and the Charity Commission have published joint guidance on the wearing of two hats for councillors acting as charity trustees.  It's available through Gov.uk or Google council_as_charity_trustee_overview.pdf

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