- 20 Jun 2023
- 3 min read
Charities Act 2022 – Phase 2 provisions and new Regulations now in force
The Charity Commission has announced that the majority of the provisions that were due to be implemented in Spring 2023 have come into force with effect from 14 June 2023.
What are the new provisions?
The latest set of changes include provisions in the Charities Act 2022 in connection with:
- Selling, leasing or otherwise disposing of charity land;
- Use of permanent endowment;
- Charity names; and
- Definition of connected persons.
The Commission have made a number of updates to their published guidance and resources in connection with these changes, all of which can be viewed on their website.
Our article published in January this year, “Charities Act 2022 – what to expect in 2023 (part 1)”, summarised the key changes that were due to come into force in Spring 2023.
Are there any variations from what was expected?
A notable change is that some of the provisions that were previously due to come into force in Spring 2023 have been pushed back to ‘the end of 2023’. These include:
- Sections 18 and 23 in connection with the personal statements that need to be provided in connection with disposing of charity land; and
- Section 24 and Sch 1: Amendments of the Universities and College Estates Act 1925 (which is expected to be included within the phase 3 commencement regulations, but not due to come into force until Spring 2025).
What is the impact of the June provisions?
These changes, although not hugely transformational, will have a beneficial impact on the sector and will introduce new flexibilities for charities. We would recommend that details of the changes are provided to your trustees to see if you may be able to benefit from any of the changes and where appropriate review your current procedures.
Now that sections 19 and 20 of the Charities Act 2022 have been implemented The Charities (Dispositions of Land: Designated Advisers and Reports) Regulations 2023 has also come into force with effect from 14 June 2023, replacing The Charities (Qualified Surveyors’ Reports) Regulations 1992 (which have been revoked by virtue of the 2023 Regulations).
These new Regulations have been drafted as a result of the changes brought in by the Charities Act 2022 which include removing the requirement for charities to have to obtain a qualified surveyor’s report on disposal of charity land.
Regulation 4 sets out the matters that must be dealt with within the designated adviser’s report for the purposes of compliance with the Charities Act. Although fairly similar in principle to the requirements in the 1992 Regulations, they are significantly simplified and the key areas that must be included are:
- The value of the land;
- Details of any steps that could be taken to enhance the value of the land;
- Whether the land should be marketed and if so, how;
- Anything else which could be done to ensure that the terms of the disposition are the best that can be reasonably obtained for the charity; and
- Any other matters which the adviser believes should be brought to the attention of the trustees.
These new provisions are likely to make it easier for trustees to comply with the Charities Act provisions on a disposition of land.
There will be a transitional period where the 1992 Regulations will apply where a charity has instructed an adviser to prepare a report to comply with section 119(1) Charities Act 2011 before the day the 2023 Regulations come into effect (14 June 2023), but the disposition of the charity land takes place after the Regulations have come into force.
The Charities (Total Return) (Amendment) Regulations 2023 have also come into force as a result of the new provisions in connection with permanent endowment under the Charities Act 2022. These Regulations set out the legal requirements that charities must follow when exercising their power to adopt a total return approach to investment.