Article 126 Transfer where charity has permanent endowment

(1)

This Article provides for the operation of Article 124 where a charity within Article 124(1) has a permanent endowment (whether or not the charity’s trusts contain provision for the termination of the charity).

(2)

In such a case Article 124 applies as follows—

(a)

if the charity has both a permanent endowment and other property (“unrestricted property”)—

(i)

a resolution under Article 124(2) must relate to both its permanent endowment and its unrestricted property, and

(ii)

that Article applies in relation to its unrestricted property in accordance with paragraph (3) and in relation to its permanent endowment in accordance with paragraphs (4) to (11);

(b)

if all of the property if the charity is comprised in its permanent endowment, that paragraph applies in relation to its permanent endowment in accordance with paragraphs (4) to (11).

(3)

Article 124 applies in relation to unrestricted property of the charity as if references in that Article to all or any of the property of the charity were references to all or any of its unrestricted property.

(4)

Article 124 applies in relation to the permanent endowment of the charity with the following modifications.

(5)

References in that Article to all or any of the property of the charity are references to all or any of the property comprised in its permanent endowment.

(6)

If the property comprised in its permanent endowment is to be transferred to a single charity, the charity trustees must (instead of being satisfied as mentioned in Article 124(3)(b)) be satisfied that the proposed transferee charity has purposes which are substantially similar to all of the purposes of the transferor charity.

(7)

If the property comprised in its permanent endowment is to be transferred to two or more charities, the charity trustees must (instead of being satisfied as mentioned in Article 124(3)(b)) be satisfied—

(a)

that the proposed transferee charities, taken together, have purposes which are substantially similar to all of the purposes of the transferor charity, and

(b)

that each of the proposed transferee charities has purposes which are substantially similar to one or more of the purposes of the transferor charity.

(8)

In the case of a transfer to which paragraph (7) applies, the resolution under Article 124(2) must provide for the property comprised in the permanent endowment of the charity to be divided between the transferee charities in such a way as to take account of such guidance as may be given by the Commission for the purposes of this Article.

(9)

The requirement in Article 124(10) shall apply in the case of every such transfer, and in complying with that requirement the charity trustees of a transferee charity must secure that the application of property transferred to the charity takes account of any such guidance.

(10)

Any guidance given by the Commission for the purposes of this Article may take such form and be given in such manner as the Commission considers appropriate.

(11)

For the purposes of Articles 124 and 125, any reference to any obligation imposed on the charity trustees by or under Article 124 includes a reference to any obligation imposed on them by virtue of any of paragraphs (6) to (8).

(12)

Article 124(13) applies for the purposes of this Article as it applies for the purposes of Article 124.