Breaking update on Charities Act 2022: Third round of changes to be implemented on 7 March

Further to our previous articles outlining the first and second tranche of the Charities Act 2022 reforms, the Department for Culture, Media and Sport (DCMS) has announced that the third tranche of changes to the Charities Act will be implemented on 7 March 2024.

To recap, this tranche will include the following:

Governance

Reforms to the rules regarding changes to charity governing documents, including:

• New criteria which the Charity Commission must consider when deciding whether or not to consent to a change to the objects of charitable companies and CIOs.

• Closer alignment between the regimes for making "regulated alterations" to the governing documents of charitable companies and CIOs.

• A new broad power for unincorporated charities to amend their constitutions, subject to the consent of the Commission when more fundamental changes are proposed.

Land disposals

Changes to statements and certificates for disposals of charity land (and mortgages), including:

• Amendments to exceptions to the general restrictions on disposing of charity land.

• Changes to the information that must be included in statements and certificates.

Importantly, once implemented, where there is an appropriation to a single charity, that charity will no longer need to counter-sign the transfer (or other disposal document) to provide the certificate.

Register of mergers

A change to the wording of the provisions of the Charities Act 2011 that deal with gifts to merged charities, which should lessen the need for shell charities to be kept on the register post-merger to ensure that they receive certain legacies.

Additionally, the implementation of the third tranche will see changes to provisions dealing with charity mergers and the appointment and remuneration of trustees.

The Charities (Dispositions of Land: Designated Advisers and Reports) Regulations 2023

It is also worth noting The Charities (Dispositions of Land: Designated Advisers and Reports) Regulations 2023 has also come into force with effect from 14 June 2023, replacing The Charities (Qualified Surveyors’ Reports) Regulations 1992. These new Regulations have been drafted as a result of the changes brought in by the Charities Act 2022 which include removing the requirement for charities to obtain a qualified surveyor’s report on disposal of charity land.

Provisions under further consideration prior to implementation

The DCMS has confirmed that reforms to the ex-gratia payment rules will be subject to further consideration and implemented later this year. These provisions were originally intended to come in to force in the autumn of 2022 but have been deferred pending investigations of their implications for national museums and other charities.

We will provide further comment in due course, once the third tranche and then further final provisions are implemented, with a recap of what has changed under each of the prior tranches.