Search Legislation

Advanced Search

Charities Act 2022

Contents

Overview of the Act

  1. The Charities Act ("the Act") gives effect to the Law Commission’s recommendations to reform various technical issues in the law governing charities. It does so primarily by amending the Charities Act 2011 ("the CA 2011") but also by amending other legislation such as the Universities and College Estates Act 1925. The impact of these changes will significantly improve the efficiency of the sector, release more funds for use on charitable purposes rather than administration, and reduce unnecessary and overly bureaucratic regulation that not only increases the sector’s costs but also is a factor in discouraging people from volunteering to become trustees.
  2. Charities legislation is commonly perceived as being complicated, uncertain and in places unduly burdensome. This can delay or prevent a charity’s activities, discourage people from volunteering to become trustees and force charities to obtain expensive legal advice. It also hinders the Charity Commission in its regulation of the sector.
  3. The Act does the following.
    • Gives charities wider or additional powers and flexibility:
      • to amend their governing documents;
      • to decide on how they procure goods and services;
      • to make "ex gratia" payments (which charities have a moral obligation, but no legal power, to make).
    • Clarifies when property can be applied cy-près, including the proceeds of failed fundraising appeals.
    • Produces a clearer and less administratively burdensome legal framework for buying, selling, leasing and mortgaging charity land.
    • Clarifies and expands the statutory regime that applies to permanent endowment.
    • Introduces a power – with appropriate safeguards – for charities to borrow from their permanent endowment and to make certain social investments using permanent endowment.
    • Facilitates, where appropriate, charity mergers and incorporations.
    • Confers additional powers on the Charity Commission:
      • to authorise charities to pay an equitable allowance;
      • to require charities to change or stop using inappropriate names; and
      • to ratify the appointment or election of charity trustees where there is uncertainty concerning the validity of their appointment or election.
    • Improves and clarifies certain powers of the Charity Tribunal.

Back to top