The changes relate to how trusts and unincorporated associations may amend their governing instruments, the disposal of charitable property, new statutory powers for the Commission and changes aimed at saving gifts to charities that have merged.

What are the changes?

The main amendments are:

• New statutory powers for trusts and unincorporated associations to amend their governing documents

These changes are intended to harmonise the rules that apply to charities whether they are structured as trusts, unincorporated associations, charitable incorporated organisations or limited companies. Charity Commission authority will still be required for regulated alterations. 

• Changes to the rules on the disposal of charity property

There is now a clear exception to the rules relating to the disposal of charitable property for liquidators, receivers, mortgagees or administrators.

In addition, there are changes to the statements and certificates that must be given in property disposals and mortgages. Previous legislation required certificates to be given by the trustees themselves (rather than the charity), which often led to confusion and complicated execution requirements.

• New statutory powers for the Charity Commission to ratify the appointment or election of a charity trustee

The Charity Commission is now able to ratify the appointment or election of a charity trustee where there may have been uncertainty in the validity of the appointment or election. The new power also allows the Charity Commission to be able to vest property in the trustee(s) as well as ratifying actions of the trustee(s) undertaken before the order was made.

• New statutory power for the Charity Commission to order a charity to pay a charity trustee or to retain a benefit already received for work carried out for or on behalf of the charity where it would be inequitable for them not to be paid or retain the benefit

While this may be a helpful new power, it is subject to certain restrictions, including that such a benefit must not be expressly prohibited by the charity's governing instrument.

• New rules to allow gifts to a named charity which has merged (and is registered on the register of mergers) to take effect as a gift to the merged charity

This is a welcome amendment which closes a loophole in previous legislation, which often resulted in charities that merged leaving a shell charity 'open' purely for the purposes of receiving subsequent legacies.

While provisions repealing the University and College Estates Act 1925 are included in the commencement regulations, these amendments are delayed until 2025.

If you have any queries in relation to these recent changes, please do contact us.