The final sections of the Charities Act 2022 are due to come into force on Thursday 7 March 2024. The majority of the Act already being in force, there are only a few sections still to implement, but sections which will have an impact on the way charities conduct their day to day business.
The changes are in 4 main areas:
Charity Constitutions
Changes are coming into force for unincorporated charities, trusts, charitable companies and CIOs wishing to change their constitutions.
- There will be a broad new power for trusts and unincorporated associations to amend their constitutions where they have no constitutional power to do so. This new power replaces a complex, but in places useful, set of powers that depended on the size of the charity. This power will require Charity Commission consent for changes including new objects or changes to trustee benefits. Overall we think this simpler regime will make life easier for these charities.
- The Commission will apply the same legal test when deciding whether to give authority to charitable companies, CIOs, trusts and unincorporated charities to change their charitable purposes. This appears a little stricter than the previous test for incorporated charities seeking consent.
- There is also a new power for the Charity Commission to give public notice, or to direct a charity to give notice, of regulated alterations to a governing document.
Charity Mergers
On a merger, any legacies left to the original merged charities will fail, unless the merger was registered on the Register of Mergers. Even then there were problems and some legacies were lost. This new rule will allow most gifts to charities that merge to take effect as gifts to the charity they have merged with, provided the merger has been registered, so legacies cannot be lost.
The existing statutory process for certain (small) unincorporated charity mergers will be repealed.
Charity Land
A number of provisions, delayed since June 2023 are coming into force:
- provisions relating to disposals and taking out of mortgages by liquidators, provisional liquidators, receivers, mortgagees or administrators
- changes about what must be included in statements and certificates for both disposals and mortgages – trustees will no longer need to sign a certificate of compliance. Instead the transfer deed and contracts will contain a statement confirming the charity has complied with all obligations. We advise charities to update their procedures in preparation for their next transaction.
Note that changes associated with the Universities and College Estates Act 1925 are now due on 19 May 2025.
Charity Trustees
Minor changes here. The Commission has new powers to
- Approve a payment for goods and services already paid to a trustee; and
- Ratify defective trustee appointments.
If you would like a reminder of previous sections of the Act our other blogs may be useful.
October 2022
February 2023
June 2023
The delayed ex-gratia provisions are due in 'later in 2024' ex gratia update
If you have any questions about how these changes will affect your charity, get in touch with Neil Burton [email protected]
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