The Regulator for Charities in England and Wales

Operational Guidance

Glossary of terms used in OGs

Term

Definition

1960 Act The 1960 Act means the Charities Act 1960, now repealed.
1992 Act The 1992 Act means the Charities Act 1992.
1993 Act The 1993 Act means the Charities Act 1993.
2006 Act The 2006 Act means the Charities Act 2006.
Accounts Accounts means the statutory accounts required to be submitted to us in respect of the relevant financial year of a charity.
Annual report Annual report means the trustees’ annual report prepared under s.45 of the 1993 Act.
Body corporate A body corporate is a collection of persons which, in the eyes of the law, has its own legal existence (and rights and duties) separate from those of the persons who form it from time to time. It has a name or title of its own and may also have a common seal for use on official documents. Also known as corporations, bodies corporate are not necessarily companies, but companies are by definition bodies corporate.
Breach of trust Breach of trust means a breach of any duty imposed on a trustee. For charity trustees, these duties may be imposed by the provisions of a charity’s governing document, laws and regulations, or Orders of the Court or the Charity Commission. A duty is something which trustees have to do. It is distinguished from a power which trustees may or may not choose to use.
CDB CDB stands for the Charity Database, the Commission's computerised database which holds information on every registered charity.
CDD CDD used to stand for Charity Database Division, the division in our Liverpool office which issues and processes Annual Returns, and records and vets charities' accounts. The section is now known as Compliance, part of the Compliance and Support function.
CDF CDF means common deposit fund. CDFs are charities established by Scheme under s.25 of the Charities Act 1993.
CIF A CIF is a common investment fund established by scheme under s.24 of the 1993 Act. But the definition for the purposes of the Charities (Accounts and Reports) Regulations 1995, and the Financial Services and Markets Act 2000 (Exemption) Order 2001, and clause 38 of the Trustee Bill excludes such funds whose trusts provide for participation only by charities which have the same charity trustees as the fund (ie, pool charities).
  In a CIF a participating charity has a "share" or a number of the "units" in a portfolio of the CIF rather than an individual list of stock holdings of its own.
  CIFs are established as separate charities in themselves (ie aside from the individual participating charities), with trustees appointed in accordance with the Scheme.
CMF CMF stands for Cyclical Maintenance Fund, a fund often set up by almshouse charities, and by some registered social landlords, to provide ordinary items of maintenance and repair which recur at infrequent but regular intervals, such as external and internal decoration.
CMS CMS stands for Case Management System, a computerised system of recording casework and tracking its progress.
CSM CSM stands for Customer Service Manager. OG 93 B2 explains the role of CSMs.
Charitable company A charitable company means a company:
 
  • formed and registered under the Companies Act 2006; this will also include a company already registered under the Companies Act 1985, or one which was already in existence at that time;
    •   and which
     
  • is established for exclusively charitable purposes.
    • Charitable institution This is defined by s.58(1) of the 1992 Act as a charity or an institution (other than a charity) which is established for charitable, benevolent or philanthropic purposes.
    Charity trustees Charity trustees has the same meaning as in s.97(1) of the Charities Act 1993, that is, the persons having the general control and management of the administration of a charity, regardless of what they are called.
      For instance, in the case of an unincorporated association the executive or management committee are its charity trustees, and in the case of a charitable company it is the directors who are the charity trustees.
    Codicil A codicil is a document similar to a will but which amends a will. The same rules apply to it as to a will.
    Commercial participator A commercial participator is someone who carries on for gain a business other than a fund-raising business (ie one to which the provisions on professional fund-raising might apply), but in the course of that business engages in any promotional venture in the course of which it is represented that charitable contributions are to be given or applied for the benefit of any charitable institution(s). (Statutory definition – see s.58(1) of the 1992 Act).
    Community Trust or Community Foundation A Community Trust or Community Foundation is a fund-raising and grant making charity established to raise new resources for local charities in a specific geographic area (or "community") and to promote the effective use of these resources. Community Trusts are most commonly constituted as charitable companies limited by guarantee.
    Connected person The precise meaning of connected person for the purposes of s.36(2) of the 1993 Act (the disposal of charity land) is given in Schedule 5 to that Act. This includes:
     
  • a trustee of or for the charity, a donor of any land to the charity and close relatives of such trustees or donors;
    •  
  • employees, officers, or agents of the charity;
    •  
  • the spouses and civil partners of all such persons above;
    •  
  • institutions controlled by any of the persons above or companies in which such persons have a substantial interest.
    •   The definition for the purposes of the Charities (Reports and Accounts) Regulations 1995 and the Charities (Annual Return) Regulations is different.
    Corporation See body corporate above.
    Court The Court means the High Court or any other court in England and Wales having concurrent jurisdiction or any judge or officer exercising that jurisdiction.
    Custodian A custodian is a person who holds for safekeeping the documentary evidence of the title to property belonging to a charity (eg, share certificates, title deeds to land, etc). The title to the charity’s property remains vested in the charity trustees, or in their nominee(s), or custodian trustee, as the case may be. The custodian has no power to manage the property and no role in the administration of the charity.
      (This is a narrow definition of the term as used within the Commission and in relation to charities. In the investment world the term may be used to cover a wider range of responsibilities particularly in relation to foreign investments).
      See also custodian trustee which has a very particular meaning (although SORP 2005 uses this term in a more general way to include any other non-executive trustees).
    Custodian trustee A custodian trustee is a corporation appointed to have the custody, as distinct from the management, of trust property. (Exceptions are the Public Trustee, the Treasury Solicitor and the Official Custodian, the only individuals able to act as custodian trustees). Where a custodian trustee is appointed to hold property of a charity, the administration of the charity is left in the hands of the charity trustees. The term custodian trustee was introduced by s.4 of the Public Trustee Act 1906. A custodian trustee is not a charity trustee. See also holding trustee which has a related but different meaning.
    Cy-près Cy-près is a Norman French word meaning "near this". Application of the cy-près doctrine enables us and the Courts to prescribe new purposes for a charity whose existing trusts have "failed".
    De minimis The full expression is de minimis non curat lex. This is a Latin phrase which means "the law does not care about very small matters". It can be used to describe a component part of a wider transaction, where it is in itself insignificant or immaterial to the transaction as a whole, and will have no legal relevance or bearing on the end result.
    Designated funds The trustees may exercise their discretion to set aside part of an unrestricted fund for designated purposes. Designated funds may also be used where donors have expressed a preference without imposing a trust. The funds so designated remain unrestricted since the trustees can remove the designation at any time (cf restricted fund).
    Designated land This is land required to be used for a particular charitable purpose as referred to in the 2006 Act. It is also sometimes referred to as specie land.
    Distinct charity A distinct charity is:
     
  • a charitable institution having a distinct foundation. For example:
    •    
  • an incorporated charity - whose governing document will be a memorandum and articles of association, Royal Charter, or Act of Parliament - is always a distinct charity;
    •    
  • the permanent endowment, expendable endowment and income funds of a particular charity, although held on separate trusts, are not distinct charities;
    •    
  • any other special trust/restricted fund created by the trustees of an existing charity, under a power contained in its governing document, is not a distinct charity (unless it is the intention of the trustees to create one);
    •    
  • a designated fund is not a distinct charity. (Trustees are legally obliged to use the funds of the charity in the manner specified in the governing document, although for administrative convenience they may designate or "earmark" some of the funds of a distinct charity for some special purpose within its objects).
    •   A distinct charity is separately registrable (subject to s.3(5) requirements) unless it has been the subject of a uniting direction with one or more other charities under s.96 of the 1993 Act.
      It also accounts as a single entity, but its accounts may be grouped with those of other charities, if:
     
  • other charities been united with it for accounting purposes under s.96; or
    •  
  • it is a special trust of another charity; or
    •  
  • another charity is a special trust of it.
    • ERA 1988 The ERA 1988 is the Education Reform Act 1988.
    ERF ERF stands for Extraordinary Repair Fund, a fund often set up by almshouse charities, and by some registered social landlords, to provide for major "one-off" repairs and improvements (such as re-roofing or providing a new central heating system) or for rebuilding.
    Ecclesiastical charity An ecclesiastical charity (as defined by s.75 of the Local Government Act 1894) is a charity, the endowment of which, is held for one or more of the following purposes:
     
  • for any spiritual purpose which is a legal purpose;
    •  
  • for the benefit of any spiritual person or ecclesiastical officer;
    •  
  • for use, if a building, as a church, chapel, mission room or Sunday school or otherwise by any particular church or denomination;
    •  
  • for the maintenance, repair or improvement of such a building or for the maintenance of divine service in it;
    •  
  • otherwise for the benefit of a particular church or denomination or of any members of it.
    • Ex gratia payment A proposed payment is an ex gratia payment where the trustees:
     
  • believe that they are under a moral obligation to make the payment;
    •  
  • are under no legal obligation to do so;
    •  
  • have no power under the governing document of the charity which they could properly exercise to make the payment; and
    •  
  • cannot justify the payment as being expedient in the interests of the charity within the meaning of s.26 of the 1993 Act.
    • Ex officio trustee Ex officio trustee means trustee by virtue of their office. Normally this relates to positions such as the vicar of a parish, the mayor of a town, etc. Ex officio trustees have the same responsibilities as other charity trustees.
    Excepted charities An excepted charity is one which does not have to register with us but, in most other respects, is fully within our jurisdiction. Under section 3(5) of the Charities Act 1993, as amended by the Charities Act 2006 the following charities fall into this category:
      (a) any charity which is excepted by order or regulations; and
      (b) any charity whose annual income from all sources does not amount to more than £5000.
      No charity is required to be registered in respect of any registered place of worship.
    Exempt charities Exempt charities are:
     
  • charities listed in Schedule 2 to the Charities Act 1993 (every institution listed is not necessarily a charity; the Act grants exempt status only "so far as they are charities"); and
    •  
  • any common investment fund (CIF) or common deposit fund (CDF) in which its Scheme permits only exempt charities to participate; and
    •  
  • any other charities which legislation declares to be exempt.
    • Expendable endowment An expendable endowment fund is a fund that must be invested to produce income. Depending on the conditions attached to the endowment, the trustees will have a legal power to convert all or part of it into an income fund which can then be spent.
      An expendable endowment differs from an income fund in that there is no actual requirement to spend the principal for the purposes of the charity unless or until the trustees decide to. However, income generated from expendable endowment is no different from income generated from permanent endowment, and should be spent for the purposes of the charity within a reasonable time of receipt.
      If there is really no evidence, either direct or circumstantial, as to a donor's intention, then a gift should be treated as income. (See also Permanent endowment).
    Express prohibition An express prohibition refers to wording in a charity’s governing document that clearly forbids a particular course of action. An example would be an instruction against paying trustees. This would usually be couched in negative terms, for example, "The trustees shall not pay ..." or "No trustee shall be paid ...". But a form of wording that says "All trustees must act gratuitously" would also be an express prohibition.
    FHEA 1992 The FHEA 1992 is the Further and Higher Education Act 1992.
    Financial Services Authority (FSA) The Financial Services Authority was established by the Financial Services and Markets Act 2000. Included in its functions is the regulation of the management and annual accounts of unit trusts - see the OG 49 series.
    Gift Aid Gift Aid is a tax relief for single outright cash gifts made to charity by individuals (including those carrying on a trade) and companies in the UK
    Governing document A charity's governing document is any document which sets out the charity's purposes and, usually, how it is to be administered. It may be a trust deed, constitution, memorandum and articles of association, conveyance, will, Royal Charter, Scheme of the Commission, or other formal document.
    Gross income A charity’s "gross income" for the purposes of the thresholds in charity legislation is defined as all the incoming resources of its income funds, together with any transfers from endowed funds of capital converted into income. It does not include receipts directly into endowed funds and capital gains on investments or disposal of functional fixed assets. This is because all capital gains and losses are disregarded in determining whether the financial thresholds, specified in the 1993 Act, as amended by The Charities Act 1993 (Substitution of Sums) Order 1995 (SI No.1995/2696), have been exceeded.
    Health Service body Health Service body (HSB) means any body established to carry out functions in relation to the NHS, in particular:
     
  • any Regional, District or Special Health Authority;
    •  
  • any Special Trustees;
    •  
  • any NHS Trust; or
    •  
  • any trustees appointed for an NHS Trust by Order made by the Secretary of State for Health under s.11 of the National Health Service and Community Care Act 1990.
    • Holding trustees Holding trustees, or some similar name, are individuals who are appointed to hold the legal title of charity property. The governing document may confer other duties or responsibilities on holding trustees and so it is important that it is consulted in every case. See also custodian trustee which has a related but different meaning.
    Housing Corporation The Housing Corporation is a Non-Departmental Public Body, sponsored by the Department of Communities and Local Government. Its function is to promote, finance and supervise Registered Social Landlords (RSLs) in England. It has wide discretionary powers and distributes a large proportion of the grants used by RSLs for propert development programmes. The National Assembly for Wales exercises an equivalent role in Wales having taken over following the abolition of Housing for Wales (Ty Cymru).
    Housing for Wales Housing for Wales (Tai Cymru or alternatively Ty Cymru) was a Non Departmental Public Body created by the Housing Act 1988 and sponsored by the former Department of Environment, Transport and the Regions. It had the same powers and fulfilled the same functions as the Housing Corporation (see above) but operated throughout Wales. It was abolished in March 1999 (under the Government for Wales Act 1998), its powers and functions passing for a short time to the Secretary of State for Wales. On 1st July 1999, these powers and functions were then transferred to, and are currently carried out by, the National Assembly for Wales.
    Hybrid pool charities Hybrid pool charities are common investment funds. They are not pooling scheme funds within the meaning of the Financial Services and Markets Act 2000 (Exemption) Order 2001, or for the purposes of the Trustee Bill, or for the purposes of the accounting regulations. See OG 49 A1 and OG 49 B7.
      See also pool charities.
    ICR The ICR is the Independent Reviewer to whom Commission customers may complain if they remain dissatisfied having gone through our internal complaints procedure. See OG 93 B3.
    IMRO IMRO means the Investment Management Regulatory Organisation, which is responsible for regulating the management and annual accounts of unit trusts. IMRO was abolished by the Financial Services and Markets Act 2000, and its functions were taken over by the Financial Services Authority (FSA). See OG 49 B7.
    Income funds Income funds are all incoming resources that become available to a charity and that the trustees are legally required to apply in furtherance of its charitable purposes within a reasonable time of receipt (the proper exercise of a power of accumulation is an application).
    Independent examiner An independent examiner is an independent person who is reasonably believed by the charity trustees to have the requisite ability and practical experience to carry out a competent examination of its accounts.
    Interim manager Interim manager means the person appointed by Order of the Commission under s.18(1)(vii) of the 1993 Act to act in respect of the property and affairs of a charity.
    Land Land includes:
     
  • buildings and other structures;
    •  
  • land covered with water; and
    •  
  • any estate, interest, easement, rentcharge or other right in or over land.
    • Linked charity A linked charity is one which is regarded, as the result of a uniting direction under s.96, or, in the case of accounting, because it is a special trust, as being part of the "reporting charity" for the purposes of registration and/or accounting. The reporting charity and the linked charities will be registered under the same number. A single annual report and accounts, and annual return, will be prepared for the reporting charity and for any charities linked with it for accounting purposes, either under s.96 or because they are special trusts. Examples where charities are united will include:
     
  • a number of small charities with largely similar purposes for the benefit of a particular parish;
    •  
  • two or more charities having common trustees as with NHS charities.
    • Local charity A local charity is defined in s.96(1) of the Charities Act 1993 as a charity established for purposes which are directed wholly or mainly to the benefit of a particular area (whether stated in the trusts of the charity or implicit in its purposes).
    Material/
    materiality    		 Materiality is the final test of what information should be given in a particular set of financial statements. An item of information is material to the financial statements if its misstatement or omission might reasonably be expected to influence the economic decisions of users of those financial statements, including their assessments of stewardships. Immaterial information will need to be excluded to avoid clutter which impairs the understandability of other information provided.
      Whether information is material will depend on the size of and nature of the item in question judged in the particular circumstances of the case. Materiality is not capable of general mathematical definition as it has both qualitative and quantitative aspects. A fuller definition is given in paragraph 21 of Appendix 1 of SORP 2000 (page 71).
    NHS Trusts / Charities An NHS trust or an NHS charity is a trust or charity whose trustees are a health service body.
    Nominated trustee A nominated trustee (sometimes known as a representative trustee) is a person appointed to a trustee body by some other person or body, eg a local authority. They have exactly the same duties and responsibilities as other charity trustees and must act independently of their nominating body.
    Non-company charity A non-company charity is a non-exempt charity other than those which are formed and registered under the Companies Act 1985 and the Companies Act 2006, or to which the provisions of those Acts apply.
    OC See below.
    Official Custodian for Charities The Official Custodian for Charities (the OC) is a member of the Commission's staff who is appointed by the Commissioners to hold land and, in a few special cases, investments on behalf of charities. See publication CC13. Subject to the provisions of the 1993 Act, the OC has all the same powers, duties, and liabilities of a custodian trustee, is entitled to the same rights and immunities, and is subject to the control and Orders of the Court.
    Official Receiver The Official Receiver is appointed by the Secretary of State - in practice the DTI. In the case of bankruptcy, the Official Receiver investigates the conduct of the debtor, acts as interim receiver and presides at the first meeting of the creditors. Where an organisation is to be wound-up, the Official Receiver acts as the provisional liquidator as soon as the winding-up order is made.
    Official Solicitor The Official Solicitor is an official who acts for those involved in High Court proceedings who are under a disability, eg a child or a person with a learning disability. The Official Solicitor will appear as next friend where there is no other person willing or competent to do so. He may also defend a minor or patient, as a litigation friend in a court action.
    Order An Order is a legal document made by us or the Courts authorising the charity trustees to carry out an act which otherwise they have no power to do. We cannot make an Order to do anything which overrides a specific prohibition in the charity's governing document.
    Parochial Church Council The elected body or council dealing with the finance and organisation of the church in a parish or ecclesiastical district. The powers of PCC's are laid down in the Parochial Church Council (Powers) Measure 1956. The PCC is a body corporate with perpetual succession, but without a common seal.
    Payroll Giving Payroll Giving is a tax effective way in which employees (and pensioners in an employer’s occupational pension schemes) can give to charity. Employees can authorise their employer to deduct charitable donations from their pay. Because donations are deducted from pay before Pay As You Earn tax is calculated, the employee gets tax relief at his or her top rate of tax.
    PCC A PCC is a Parochial Church Council - see above.
    Permanent endowment Permanent endowment is property of the charity (including land, buildings, cash or investments) which the trustees may not spend as if it were income. It must be held permanently, sometimes to be used in furthering the charity’s purposes, sometimes to produce an income for the charity. The trustees cannot normally spend permanent endowment without our authority.
      The terms of the endowment may permit assets within the fund to be sold and reinvested, or may provide that some or all of the assets are retained indefinitely (for example, a particular building). (See also Expendable endowment).
    Pool charities Pool charities are a particular type of common investment fund created by scheme under s.24 of the 1993 Act. The feature which distinguishes it from other common investment funds is that all charities eligible to participate must, at the time when any contribution is made to the pool, be administered by exactly the same body of trustees which the pooling scheme appoints as the charity trustee(s) of the pool charity.
      Pool charities are pooling scheme funds within the meaning of the Financial Services and Markets Act 2000 (Exemption) Order 2001.
      The individual participating charities are not amalgamated by such a scheme and will have to account separately unless they have been the subject of a uniting direction for accounting purposes, or are special trusts. Where the participating charities account separately they will normally also be registered separately. In these circumstances, the pool charity will also be given separate registration as a reporting charity. (See OG 49, Pooling schemes for further information).
      See also hybrid pool charities.
    Primary purpose trading Primary purpose trading is a trade exercised by a charity in the course of the actual carrying out of its primary purpose. The following are examples of what might be regarded as trading in this manner:
     
  • The provision of educational services by a school or college in return for course fees.
    •  
  • The provision of residential accommodation by a resident care charity in return for payment.
    •  
  • A trade in which a primary purpose of the charity is carried out by beneficiaries.
    • Professional fund-raiser A professional fund-raiser is a person (other than a charitable institution) who carries on a fund-raising business or otherwise for reward solicits money or other property for the benefit of a charitable institution. (Statutory definition – see s.58(1) of the 1992 Act).
    RRA RRA means the Race Relations Act 1976.
    Receiver and manager See Interim manager
    Registered place of worship A registered place of worship means any land or building falling within s.9 of the Places of Worship Registration Act 1855.
    Registered Social Landlord Registered Social Landlord (RSL) is the term for not-for-profit providers of social housing approved and regulated by the Housing Corporation in England, and in Wales by the National Assembly for Wales. RSLs, rather than local councils, are now the main providers of new social housing.
      The vast majority are known as housing associations, and have objects which include the provision, improvement, or management of low-rent/low-cost housing for those on low incomes or in housing need. Others take the form of local housing companies, housing trusts, and co-operatives, fulfilling their objects by renting, sub-market selling, construction or rehabilitation. They may also undertake management or advisory services.
      By no means all RSLs are charitable, but the main feature in common is that they are all run as businesses, but do not trade for profit. Any surplus is ploughed back into the organisation to maintain existing homes and provide new ones.
      A body is eligible for registration (under section 2 of the Housing Act 1996) as a social landlord if it is:
     
  • a housing association that is a registered charity;
    •  
  • a registered Industrial and Provident Society which fulfils certain additional conditions; or
    •  
  • a company registered under the Companies Act 1985 which fulfils those conditions.
    •   It is not compulsory for housing associations to register with the Housing Corporation, but this is usually essential to qualify for public funding and/or accept the transfer of local authority housing stock.
      The provision of housing is currently only considered charitable where it is provided for proper charitable beneficiaries. Charitable RSLs operate over a wide spectrum of activity. Examples include: the provision of housing for the homeless or persons in economic need; provision of sheltered accommodation for the elderly; homes for the chronically sick or disabled (mentally or physically); hostels for young single people; promoting urban or rural regeneration by provision or improvement of housing in the public sector or in charitable ownership.
      Roughly half of all charitable RSLs are Industrial and Provident Societies, which are exempt from registration with us.
      Almshouse charities (which total around 1800) are housing associations within the terms of section 1(1) of the Housing Associations Act 1985. Just over a quarter of them are RSLs. (Separate guidance on almshouse charities is contained in OG 65).
    Rentcharge A rentcharge is (most commonly) an annual sum payable in respect of land, which is not:
     
  • rent reserved by a lease or a tenancy; or
    •  
  • interest.
    •   The person to whom it is paid is not the owner of the land. A rentcharge could be created by a person selling land to another but reserving to himself and his heirs or to some third party an annual sum payable by the purchaser and by any subsequent owner of the land. This was once a popular device for endowing or augmenting the endowment of a charity but since 22 August 1977 the creation of new rentcharges has been prohibited (except in a few particular circumstances) by the Rentcharges Act 1977. That Act provides that most of those which still subsist at that date will be extinguished on 21 July 2037.
    Reporting charity A reporting charity is a distinct charity which is the focus for reporting and/or registration of linked charities.
      The reporting charity will produce only one set of accounts and returns for the reporting charity and for any charities linked with it for accounting purposes.
      NB: Reporting charities were formerly known as main charities (or in the context of NHS trusts, umbrella charities). Use of this term has been discontinued, since it implies a hierarchical relationship which may not legally exist, and which may be misleading in the context of group registration and accounting. Under a s.96(6) uniting direction charities can be linked for registration or accounting even though there is no relationship between them which can be labelled main/subsidiary, or anything similar.
    Representative trustee A representative trustee (sometimes known as a nominated trustee) is a person appointed to a trustee body by some other body or person. They have exactly the same duties and responsibilities as other charity trustees and must act independently of the body which appointed them.
    Reserves The term "reserves" has a variety of technical and ordinary meanings, depending on the context in which it is used. In the charities SORP 2000 we use the term "reserves" (unless otherwise indicated) to describe that part of a charity's income funds that is freely available for its general purposes. "Reserves" are therefore the resources the charity has or can make available to spend, for any or all of the charity's purposes, once it has met its commitments and covered its planned expenditure. See OG 43 B1.
      More specifically this defines reserves as income which becomes available to the charity and is to be spent at the trustees' discretion in furtherance of any of the charity's objects (sometimes referred to as "general purpose" income); but which is not yet spent, committed or designated (ie, is "free").
    Restricted funds Restricted funds are funds subject to specific trusts which may be declared by the donor(s), or with their authority (eg, in a public appeal), but still within the objects of the charity. Restricted funds may be restricted income funds, which are expendable at the discretion of the trustees in furtherance of some particular aspect(s) of the objects of the charity, or they may be capital funds, where the assets are required to be invested, or retained for actual use, rather than expended.
      Some charities have power to declare specific trusts over unrestricted funds. If such power is available and is exercised, the assets affected will form a restricted fund, and the trustees' discretion to apply the fund will be legally restricted.
    Royal Sign Manual The signature or "royal hand" of the monarch when personally signing a letter giving directions as to administration. The Attorney General, the principal law officer of the Crown, now signs in place of the sovereign.
    SR&O This stands for Statutory Rules and Orders and is the forerunner of the term Statutory Instrument (SI). Its use was discontinued in 1947, but staff may still come across it when referring to older legislation still in force.
    SSFA 1998 The SSFA 1998 is the School Standards and Framework Act 1998.
    Scheme A Scheme is a legal document which amends, replaces or amplifies the trusts of a charity.
      It may be:
     
  • a fully regulating Scheme which deals with all aspects of a charity's administration and becomes the governing document of the charity; or
    •  
  • a non-regulating Scheme dealing with some particular aspect of the charity's purposes or administration by amending or amplifying the charity's governing document, or by authorising a particular action prohibited by the trusts of the charity.
    • SOFA SOFA stands for Statement of Financial Activities. A charity's SOFA shows all the incoming resources becoming available during the year and all its expenditure for the year, and reconciles all the changes in its funds. The SOFA should account for all the funds of the charity and should be presented in columns representing the different types of funds.
    SORP - the Charities SORP The Charities SORP means the Statement of Recommended Practice: "Accounting by Charities", published by the Charity Commission under the auspices of the Accounting Standards Board.

    (Note: The Charities SORP applies to charities generally in the UK unless a more specific SORP applies, such as for the Higher and Further Education Institutions or Registered Social Landlords).

    SORP 2000 - the Charities SORP 2000 SORP 2000 means the Statement of Recommended Practice: "Accounting and Reporting by Charities", published by the Charity Commission under the auspices of the Accounting Standards Board in October 2000
    SORP 2005 - the Charities SORP 2005 SORP 2005 means the Statement of Recommended Practice: "Accounting and Reporting for Charities", published by the Charity Commission under the auspices of the Accounting Standards Board in March 2005. It superseded the SORP 2000 and applied to accounting periods beginning on or after 1 April 2005.
    Special trust A special trust means funds or property held and administered on its own separate trusts by or on behalf of a main charity for any special purposes of that charity. It follows that the objects of a special trust must be narrower than those of the main charity.
    Special visitor A special visitor is a person appointed by the founder of a charity to supervise and investigate a particular aspect of its internal affairs. Special visitors have no power to alter the statutes of a charity.
    Specie land Specie land is land required to be used for a particular charitable purpose.
    Statutory declaration A statutory declaration is a signed statement made by virtue of the Statutory Declarations Act 1835 before an officer authorised to administer an oath, such as a justice of the peace, Commissioner for Oaths or a solicitor with a practising certificate. It has the same effect as a sworn document (an Affidavit).
    TIA The TIA means the Trustee Investments Act 1961 as amended.
    TLAT TLAT is the Trusts of Land and Appointment of Trustees Act 1996.
    Testator/ testatrix A testator (male), or testatrix (female), is a person who has made a will.
    Threshold for audit For financial years starting on or after 27 February 2007, the accounts of a charity should be audited if the gross annual income exceeds £500,000 in the relevant year. Where the income is less than this, an audit will be needed only if assets are worth more than £2.8m - there is no minimum income limit for charitable companies but for non companies there is a minimum income threshold of £100,000.
    Total expenditure Total expenditure means the total gross recorded expenditure of the charity for the financial year. (This is the figure which Information Compliance enter on the Charity Database from information included in the Annual Return, supplied to us annually by registered charities.) It should include the expenditure of all other charitable entities united with the charity for the purpose of financial reporting. This figure (together with the figure for gross income) is used to determine the size of the charity for the purposes of Part VI of the 1993 Act.
      General guidance on how to calculate total expenditure for the financial year is provided in the explanatory notes which accompany the annual return form sent out to each charity. These state:
        You should include gross expenditure shown in the accounts of the relevant funds.
        You should include the following in expenditure:
       
  • expenditure relating to the objects of the charity including grants, donations, cost of services provided and support costs;
    •    
  • management and administration costs of the charity;
    •    
  • fund-raising and publicity costs;
    •    
  • interest payable; and when accounts are prepared on an accruals basis:
    •    
  • depreciation or amortisation of assets held.
    •     And you should exclude the following from expenditure;
       
  • making of a loan;
    •    
  • repayment of a loan;
    •    
  • purchase of investments and fixed assets;
    •    
  • losses on disposal of investments and fixed assets.
    •     Where accruals accounts are prepared, the figure for total expenditure is the total of the figures entered under paragraph 3(b) of Part 1 of Schedule 1 to the Charities (Accounts and Reports) Regulations 1995 (but leaving out any amount which represents losses on the disposal of functional fixed assets).
    Trust corporation A trust corporation, as defined by s.68(18) of the Trustee Act 1925, is either a corporation appointed by the Court (or ourselves) to be a trustee, or one entitled by rules made under the Public Trustee Act 1906 to act as custodian trustee.
    Trustee for a charity A trustee for a charity is a person, not being a charity trustee, in whom legal title to the property of the charity is vested.
    Trustees Trustees means Charity trustees
    Ultra vires Ultra vires means beyond one’s powers, unauthorised.
    Umbrella charity / umbrella organisation The terms umbrella charity and umbrella organisation are no longer in general use - except in the limited context of NHS charities. (See definition of reporting charities~#Reporting}).
    Uniting direction A uniting direction is a direction made under either s.96(5) or s.96(6) of the 1993 Act allowing two or more charities to be linked for all or any of the purposes of that Act. The basis for a uniting direction is different in each case:
     
  • for a direction under s.96(5), the criteria rests on the purpose of the charities concerned: one of the charities must be established for any special purpose of or in connection with another. Under s.96(5) we can treat one or more charities as forming part of another whenever both or all of them are identified with the same charitably provided service and are administratively interdependent;
    •  
  • for a direction under s.96(6) the criteria is common trusteeship; discretionary emphasis will also be placed on charities having broadly similar purposes.
    •   The purpose of giving a direction is to achieve the administrative linking of charities where it is practical to do so. Where there is a close connection between the purposes and/or administration of two or more charities, we normally wish to encourage the preparation of a single annual report and statement of accounts.
    Will A written document which disposes of the property of the person making it on his or her death. It must be signed by the person making it and in England and Wales must be witnessed by two witnesses. There are detailed rules about how that must be done. In Scotland a will may be valid if it is in the maker's handwriting. In any case of doubt advice from Legal Division should be sought.

     

    Go to Alphabetical Index to Operational Guidance

    Numerical List of Operational Guidance

    Welcome to Operational Guidance

    Top of Page