A new set of requirements from the Charities Act 2022 have now come into force.

This is the second set of measures introduced by the Charities Act, with the first set of changes announced in October 2022 and the final set due to come into effect by the end of 2023.

The intention of the changes is to give charities flexibility and to make certain processes easier. The most recent set of changes, outlined below, are particularly relevant for trustees who want to sell, or otherwise dispose of, charity land.

An overview of the provisions that came into force on 14 June 2023

Selling, leasing or otherwise disposing of charity land

There has been simplification of some of the legal requirements charities must comply with before they dispose of charity land. Changes include

  • Expansion of the category of designated advisers who can provide charities with advice on certain disposals;
  • Confirmation that a trustee, officer or employee can provide advice on a disposal if they meet the relevant requirements;
  • Providing trustees with the discretion to decide how to advertise a proposed disposal of charity land; and
  • The removal of the requirement for charities to get Commission authority to grant a residential lease to a charity employee for a short periodic or fixed term tenancy.

Using permanent endowment

New statutory powers now enable charities to

  • Spend, in specific circumstances, a proportion or all of their permanent endowment fund where the market value of the fund is (£25,000 or less) without Commission authorisation;
  • Borrow, in specific circumstances, up to 25% of the value of their permanent endowment fund without Commission authorisation; and
  • Use permanent endowment to make social investments with a negative or uncertain financial return, provided any losses are offset by other gains – this is for charities that have opted into a total return approach to investment.

Charity names

New statutory powers now enable the Charity 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; and
  • Delay registration of a charity with an unsuitable name or delay entry of a new unsuitable name onto the Register of Charities. Working with the principal regulator, the Commission can also use these naming powers on exempt charities.

The full implementation plan for the Charities Act 2022 can be found here.

Should you have any queries on what the changes to the Charities Act 2022 mean for your charity, please get in touch with Alice Lynch or Frank Shippam.