Charities Act 2022: changes to be introduced in early 2024

We have previously reported on the numerous changes included in the Charities Act 2022, noting that their introduction is being phased over a period of time; changes to rules regarding paying trustees for providing services or goods to the charity, fundraising appeals that do not raise enough or raise too much, and a charity’s power to amend Royal Charters became effective from 31 October 2022, and changes to rules regarding charity names and using permanent endowments came into effect on 14 June 2023.

The next phase of changes is scheduled to come into effect in ‘early 2024’, and the Charity Commission will be releasing updated guidance on the day the provisions are implemented. Until then, the Commission have provided the following short summaries of the upcoming changes, a summary of which is below:

Making changes to governing documents

The Act is introducing a new statutory power that trusts and unincorporated associations will be able to use to make changes to their governing document. The changes include:

• how unincorporated charities must pass trustee and (where they have members) member resolutions when using the new power
• that the Commission will apply the same legal test when deciding whether to give authority to charitable companies, CIOs, and unincorporated charities changing their charitable purposes
• a power for the Commission to give public notice, or to direct a charity to give notice, of regulated alterations to a governing document

Such trusts and unincorporated associations will need to have the Commission’s authority to make these ‘regulated alterations’.

Selling, leasing or otherwise disposing of charity land

Whilst the following provisions were due to come into force on 14 June 2023, they did not, but will do from early 2024:

• provisions relating to disposals by liquidators, provisional liquidators, receivers, mortgagees or administrators
• provisions relating to the 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

Charity mergers

For certain mergers, new rules will allow most gifts to charities that merge to take effect as gifts to the charity they have merged with.

Other provisions

The Act will enable the Commission to:

• authorise a trustee to receive or retain a payment for work completed for the charity where the Commission decides it would be inequitable for a trustee not to be paid
• confirm defective or potentially defective trustee appointments

We will report in more detail on these changes when they are officially brought into force.

Civil Society have also recently reported on a letter from the Department for Culture, Media and Sport to the Charity Commission concerning museums and charities being allowed to return objects to their country of origin. It was anticipated that the associated change, set out in the Charities Act 2022 and which would have permitted museums to transfer items on ‘moral grounds’ and without Charity Commission oversight, would have already come into force, but as the letter details: “the potential consequences of these provisions were not made clear by the Law Commission when the bill was introduced.” The change is to be amended and reintroduced later in the Autumn of 2024.