New charity law provisions introduced on 31 October

Don’t be spooked – New charity law provisions introduced on 31 October

The Charities Act 2022 was given royal assent on 24 February 2022, but its provisions are being phased in. The first tranche of the Act was brought into force on 31 October. This included the following provisions:

• Section 4: Power to amend Royal Charters
• Section 5: Orders under section 73 of the Charities Act 2011
• Sections 6 and 7: Cy-près powers
• Section 8: Power of the court and the Commission to make schemes
• Section 30: Remuneration of charity trustees etc providing goods or services to charity
• Section 32: Trustee of charitable trust: status as trust corporation
• Section 36: Costs incurred in relation to Tribunal proceedings etc
• Part of Section 37: Public notice as regards Commission orders etc.
• Part of Section 40 and Schedule 2: Minor and consequential amendments

These changes are aimed at making the administration of charities easier for both charity trustees and the Commission. In the case of section 8, it confirms the Commission’s powers to make schemes for any type of charity, including companies.

Of most immediate interest to trustees are the powers to pay fellow trustees for providing goods to a charity; and the new framework for dealing with smaller ‘failed appeals’ (sections 6 and 7).

Two of the key administrative changes are in section 32 and section 37.

Section 32 confers of trust corporation status on all corporate bodies that act as trustee of land. Previously if an unincorporated charity wanted to appoint a corporate body to hold its property, it was necessary for this to be done by order of the Commission in order to confer trust corporation status on that body (this is needed in order for the body to properly deal with the property).  S32 now means you don't need an order to appoint a corporate trustee in order to secure trust corporation status. 

The provisions in section 37 might be missed by many trustees. This section amends the Charities Act 2011 so that the Commission can give or can direct another person to give, public notice not only of orders, but of requests for authority under sections 67A (new sections 6 and 7 - failed appeals), 198 (company regulated alterations), 226 (CIO regulated alterations) or 280A (unincorporated charity amendments – not yet in force). Previously requests to amend a company or CIO constitution were not subject to public notice. From 31 October the Commission can, if it wishes, ask for such notice to be given.

LBMW offers training to trustees either individually or through our programme of free to attend webinars – see the Events tab for more details. We are running a webinar on the Charities Act 2022 provisions on 14 December via zoom.

Please contact Jane Grenfell for further information.