Charities Bill [HL]

moved Amendment No. 85:"Page 46, line 20, at end insert—" ““(4A)   In the case of a merger involving the transfer of property of any charity that has both a permanent endowment and other property (““unrestricted property””), subsection (4)(a) or (b) applies in relation to any such charity as if— (a)   the reference to all of its property were a reference to all of its unrestricted property, and (b)   the reference to its ceasing to exist were omitted.”” The noble Lord said: My Lords, in moving the amendment I shall speak also to Amendments Nos. 89, 90, 91, 92, 93 and 94. The purpose of Clause 43 is to facilitate charity mergers. It does so in two ways: it speeds up the process of transferring property from one charity involved in the merger to another; and it preserves, for the benefit of the transferee charity in the merger, gifts made to the transferor charity after that charity has ceased to exist. A gift made to a charity after it has ceased to exist is currently exposed to the possibility of being ineffective as a charitable gift. In its current form, Clause 43 does not apply at all to permanently endowed charities but applies only in the case of charities which cease to exist as the consequence of a merger. The intention of a person who sets up a permanently endowed charity is that the charity cannot cease to exist. We agreed during our discussions in Committee that the courts have decided that such a charity does not cease to exist simply because the arrangements for its administration have been changed. We resisted the amendment that the noble Lord, Lord Hodgson, tabled in Committee because the merger facilitation provisions cannot be applied to property that is permanent endowment. The property is not transferred to a new charity and any gift that may be added to the endowment after the merger does not need any protection, because the charity will not have ceased to exist. However, it is possible for a charity to have both permanent endowment and other property and we accept that the provisions of Clause 43 could have a useful application to such other property, even though the charity as a whole does not cease to exist. The effect of the amendments will be that the merger of a charity with a permanent endowment can still be registered where all the unrestricted property of that charity will pass to the transferee charity. The provisions that speed up the transfer of property in a merger can be applied to the unrestricted property. Where, after the merger, a gift is made adding to the unrestricted property, that will automatically take effect in favour of the charity to which the unrestricted property passed on the merger. These provisions will not, however, affect the legal position of the charity’s permanent endowment and it will not be transferred to a new charity. Any gift adding to the permanent endowment made following the merger will take effect in the usual way. In practice, we envisage that the new charity resulting from the merger and the separate charity consisting of the permanent endowment will be managed together. The amendments also include a technical provision to ensure compatibility with the Land Registration Act 2002 where the transfer provisions apply to registered land or land which is required to be registered. That has been requested by the Land Registry to make clear that transferred land must still be registered. I beg to move.