Charities Act 2022: further changes came into force on 7 March 2024 – What do they mean for you?
The Charities Act 2022 has been implemented in stages with the latest changes having just come into force on 7 March 2024. This post looks at some key changes and what they might mean for your organisation:
Sections 1-3 Amending Governing Documents
The Act introduces new statutory powers for trusts and unincorporated associations to amend their governing documents. This will make it easier for these charities to update their structure and administration. However, the Charity Commission’s authority will be needed for certain regulated alterations (e.g. amending charitable objects, amending trustee benefits clause, altering dissolution provisions, altering restrictions on permanent endowment).
Sections 29-31 Trustee Appointments and Remuneration
Section 29 introduces a new statutory power for the Charity Commission to make an order ratifying the appointment or election of a trustee if the charity inadvertently fails to appoint correctly. The Charity Commission will also be able to vest property in the trustee(s) as well as ratifying actions of the trustee(s) undertaken before the order was made.
Section 31 gives the Charity Commission the power to order a charity to pay a trustee or allow them to retain a benefit already received for work they carried out for, or on behalf of, the charity where it would be inequitable for them not to be paid or to retain the benefit. However, this power is subject to certain conditions including whether the charity’s governing document contains an express prohibition on such remuneration/benefit.
Sections 33 to 35: Charity Mergers
These new rules will enable gifts to a charity which has merged (and entered in the Register of Mergers) to take effect as a gift to the new/merged charity. This will apply regardless of any wording in the Will that prevents a legacy to a named charity if it has ceased to exist at or before the testator’s death. This closes a loophole in previous legislation and should mean that charities will not need to retain a shell charity simply to prevent certain legacies from falling through the net.
Conclusion
These changes are expected to save charities time and money by simplifying processes and reducing administrative burdens. Their aim is to enhance good governance and promote efficiency though initially it may take charities some time to familiarise themselves with the new regimes. Updated guidance from the Charity Commission and others (e.g. HM Land Registry) will also be issued.
