Charities gain more power as more legislation enacted

Last week, the second tranche of updates arising from the new Charities Act 2022 came into effect, bringing about new powers for charities when seeking disposing of charity land, and flexibility for trustees when using permanent endowment.

What are the most recent changes to the Charities Act 2022?

With effect from 14 June, there is increased scope to the ways in which charities can deal with land, together with simplified legal requirements.

Additional changes include:

• The power for charities to spend, in certain circumstances, a proportion or all of their permanent endowment fund, where the market value of the fund is £25,000 or less without having to seek Commission approval.
• Charities can borrow, in certain circumstances, up to 25% of their permanent endowment fund without having to seek Commission approval.
• The ability to use permanent endowment to make social investments where there’s a negative or uncertain financial return, provided any losses are offset by other gains.

The Act also grants powers to the Charity commission to:

• Direct a charity to stop using a working name if it is too similar to another that already exists, or if it is offensive or misleading
• Delay registration of a charity with an unsuitable name, or delay entry of an unsuitable name on the Register of Charities.

What changes to the Charities Act 2022 will apply in Autumn 2023?

The third and final updates to the Act are due to be enacted by the end of this year include:

• Amending constitutions of charitable companies and CIOs and unincorporated charities
• New powers for the Commission to confirm a Trustee appointment where there has been doubt or defect in the process
• Changes to the provisions relating to charity mergers.

To hear our review of the changes and the impact they will have on the Charity sector, you can watch our webinar hosted by Niall Kingsley and delivered by Diane Johnson below.

As always if you have any questions about what the changes could mean for your organisation, you shouldn’t hesitate to get in touch.