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What’s in store for 2024? Charities Act changes due to be implemented this year

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As 2024 gets underway, we look at the changes that are due to come into force this year as part of the phase 3 implementation of the Charities Act 2022.

By way of reminder, The Charities Act 2022 (the “Act”) received Royal Assent on 24 February 2022. The Act was introduced following the Government’s response in 2021 to the Law Commission Report, “Technical Issues in Charity Law” (published in 2017). The Act is designed to address some technical legal obstacles and assist with the effectiveness of the administration of charities. It is being introduced in phases, with the first 2 phases having been implemented in 2023. Our earlier articles looked at phase 1 and phase 2.  

The provisions in phase 3 are due to be implemented in ‘early 2024’, and we are expecting these to be commenced in March. Details of the implementation timetable can be viewed here.

What provisions are we expecting in 2024?

In summary the provisions include:

Charity land

Sections 18 and 23 of the Act introduce:

  • an exemption for a ‘liquidator, provisional liquidator, receiver, mortgagee or and administrator’ from having to comply with the restrictions on dispositions and mortgages in sections 117 to 121 and section 124 Charities Act 2011. This means that when dealing with charity property, liquidators, provisional liquidators, receivers, mortgagee or administrators, won’t have to obtain a Designated Advisors Report or comply with the considerations on mortgages in s.124;
  • amendments to the statements that need to be provided in connection with disposing of and mortgaging charity land. Notably, this includes removing the existing requirement for charity trustees of corporate charities to have to give a separate personal statement of compliance in the document effecting the disposition or mortgage. This will be of benefit to corporate charities.
Charity constitutions

Sections 1 to 3 of the Act introduce changes and clarifications relating to:

  • provisions as to when consent is needed to alteration of charitable purposes, and what the Commission will have regard to when considering applications for consent;
  • amendments to constitutions of CIOs; and
  • amending the current powers in sections 267 to280 Charities Act 2011 (which includes powers for unincorporated charities to transfer property, alter charitable purpose and make administrative changes to their constitution) and replacing this with new provisions section 280A and 280B dealing with regulated and administrative changes in unincorporated charities. 
Charity mergers

Sections 33, 34 and 35(b) introduce some changes relating to charity mergers which includes:

  • new rules which will allow most gifts to charities that have ceased to exist following a merger to take effect as if it was a gift to the charity it merged with (for certain mergers);
  • repealing the existing statutory process for certain small unincorporated charity mergers.
Other provisions:
  • Amendments of the Universities and College Estates Act 1925: Section 24 and Sch 1: Amendments of the Universities and College Estates Act 1925 are expected to be included within the phase 3 commencement regulations but are not due to come into force until Spring 2025.
  • Section 29: Powers relating to appointments of trustees.
  • Section 31: Remuneration of charity trustees – this will include enabling the Commission to authorise a trustee to receive, or retain, payment for work it has completed for its charity, where it decides it would be inequitable for the trustee not to be paid in the circumstances.
  • General and consequential provisions, which include section 37, and section 40 and Schedule 2.

Whilst many of the changes may not have a direct and immediate impact on your charity, there are some provisions which will be of particular benefit depending on the charity’s activities. It would be worthwhile familiarising yourself with the changes and the updated guidance.

Will all remaining provisions come into force in early 2024?

Whilst phase 3 will bring in the majority of the remainder of the provisions of the Act, there are a few sections that are due to be commenced later this year. This includes sections 15 and 16 which relate to ex gratia payments.

If you have any queries or would like to speak to our charities team about how these changes may impact your charity, please do get in touch with [email protected].

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