Since the introduction of the Charities Act 2022 (replacing the Charities Act 2011), a number of changes have already been implemented with further changes set to be introduced next month. This announcement follows changes that came into effect in October 2022 with more expected to follow by the end of the year.
The Charity Commission has recently published short summaries on what’s due to come into effect, which we have detailed below.
Changes in June 2023
These are short summaries of the changes due to come into effect in June 2023. The Charity Commission will provide the relevant update guidance on the day that the changes are implemented.
Selling, leasing or otherwise disposing of charity land
Charities are required to comply with certain legal requirements before they are able to sell, lease or dispose of charity land. The insertion into the Charities Act will simplify some of these legal requirements. The changes will include:
- widening the category of designated advisers who can provide advice to charities on certain disposals.
- Confirm that a trustee, officer, or employee can provide advice on a disposal if they meet the relevant requirements.
- Giving trustees the discretion to decide how to advertise the proposed disposal of charity land.
- removing the requirement for charities to get Commission authority to grant a residential lease to a charity employee for a short period or fixed-term tenancy.
Provisions expected by the end of 2023
The following provisions are expected to come into force by the end of 2023, not in June 2023:
- the provisions relating to disposals by liquidators, provisional liquidators, receivers, mortgagees or administrators.
- the 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.
Using permanent endowment
Put simply, a permanent endowment is a property that your charity must keep rather than spend.
The Act will introduce new statutory powers to enable:
- charities to spend, in certain circumstances, from a ‘smaller value’ permanent endowment fund of £25,000 or less without Commission authority.
- certain charities borrow up to 25% of the value of their permanent endowment fund without Commission authority.
Charities that cannot use the statutory powers will require Charity Commission authority.
A new statutory power will enable charities that have opted into a total return approach to investment to use permanent endowments to make social investments with a negative or uncertain financial return, provided any losses are offset by other gains.
The Commission can currently direct a charity to change its name if it is too similar to another charity’s name or is offensive or misleading.
The Act will enable the Commission to:
- direct a charity to stop using a working name if it is too similar to another charity’s name or is offensive or misleading. A working name is any name used to identify a charity and under which the activities of the charity are carried out. For example, ‘Comic Relief’ is the working name of the charity ‘Charity Projects’
- delay registration of a charity with an unsuitable name or delay entry of a new unsuitable name onto the Register of Charities
- use its powers in relation to exempt charities in consultation with the principal regulator.
The definition of a connected person will be updated to remove outdated language.
Get in touch…
If you are one of our charity clients and require further advice on these changes, please get in touch by calling us on 01792 410100 or by sending us an email