Former charities
When can a charity be removed from the Register?
Some organisations may decide that they wish to continue to operate, but no longer want to be registered as a charity. They can request that OSCR removes them from the Scottish Charity Register (the Register) but this does not apply to Scottish Charitable Incorporated Organisations (SCIOs). Once a request is made for removal, OSCR must remove the charity in accordance with Section 18 of the Charities and Trustee Investment (Scotland) Act 2005 (the 2005 Act).
Where it appears to OSCR that a charity no longer meets the charity test, it has the power to remove the charity from the Register under section 30 of the 2005 Act. Where a charity fails to submit accounts to us then we have the power to remove them from the Register under section 45A of the 2005 Act.
When a charity is removed from the Register, it has a duty under charity law to ensure:
- that any assets held at the point of removal (and any income arising from those assets) are used in accordance with its charitable purposes as set out on its Register entry at the time of removal
- that these assets are used to provide public benefit.
OSCR has the power to monitor the use of these assets and ensure that they are used appropriately.
What happens after a charity has been removed from the Register?
We will request details of the charitable assets held at the point of removal, if this has not already been provided. We need details of all assets which the charity has, this will include:
- the amount held in any bank accounts
- amounts held as cash
- any investments held
- any property the charity has and
- other items such as debts due to be repaid to the charity and stock held.
It is important that the charity provides as much detail as possible.
A value should be provided for all assets held. This will be straightforward for items such as bank and cash and investments as these values are readily available. For items such as property and other assets you should provide the ‘realisable value’. This is the price that you would expect to receive if you sold the assets to a third party on the open market.
We will consider the level, and type, of assets held to determine if further monitoring is required.
If a charity is a cross-border charity which intends to remain registered with Charity Commission for England and Wales then no information will be required.
What happens if OSCR decides a former charity's assets require to be monitored?
If we decide that a former charity’s assets are going to be subject to monitoring, it will require to continue to submit financial information to us annually. We will require this information until such a point as the value of the assets (or income from them) have fallen below a certain level. For some assets we will require to undertake ongoing monitoring. This will be where the charity holds a permanent asset such as a property.
The financial information which we request will be proportionate to the size of the organisation and the level of assets held.
If it is not clear from the financial information, we are provided we may ask for more information to ascertain:
- That the assets are being used for the charitable purposes set out in the Register entry immediately prior to removal
- That public benefit is being provided
When does OSCR stop monitoring?
We will continue to monitor the former charity until we are satisfied that the level of assets remaining is at an acceptable level.
For non-cash assets which are not permanent, such as fixtures and fittings, or motor vehicles, we will apply a notional depreciation charge. This means that we will reduce the value of the asset each year.
Some charities will hold permanent assets such as buildings or investments which have a requirement that they must continue to be held. This means OSCR will need to monitor these assets indefinitely. The former charity will have to provide confirmation of the permanent assets’ value and it’s use annually.