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Over the last few weeks, we have published individual ebriefings on some of the key changes to be implemented following the Government’s response to the Law Commission’s report on Technical Issues in Charity Law. Below are links to each of our summaries:
- Everything’s changing in charity law: Introduction
- Part one: Charity registration financial thresholds
- Part two: Permanent endowment
- Part three: Changing charitable purposes and amending governing documents
- Part four: Remuneration for the supply of goods and the power to award equitable allowances
- Part five: Acquisitions, disposals and mortgages of charity land
- Part six: Cy-pres schemes and the proceeds of fundraising appeals
- Part seven: Ex-gratia payments out of charity funds
- Part eight: Mergers and incorporations
What other notable changes will there be?
The Charity Commission will be given an additional power to determine who can be a charity trustee. Charity trustees are defined in section 177 of the Charities Act 2011 as the persons having the general control and management of the administration of a charity. They are defined by their role and not by their description in a charity’s governing document. The Law Commission’s recommendation will give the Charity Commission a power to ratify the appointment or election of a trustee, as long as that trustee consents.
Their powers will also be extended to include the ability to change a charity’s working name (in addition to its official legal name). These powers will also cover unregistered charities as well as registered charities.
There will be clarification of the law/Charity Commission guidance as to when charity property may be available to creditors when a trustee of the charity becomes insolvent.
Which of the Law Commission’s recommendations didn’t make the cut?
Out of 43 recommendations, the Government only rejected a few including the following:
- That the requirements in section 121 of the Charities Act 2011 concerning advertising proposed disposals of designated land and considering any responses received should be abolished.
- The Government only partially accepted recommendations regarding connected persons and the disposal of charity land to wholly-owned subsidiaries.
- That the basis on which decisions of the Charity Commission can be challenged, including in particular the right of challenge to the Charity Tribunal, should be reviewed.
- That it should be possible to obtain authorisation to pursue 'charity proceedings' under section 115 of the Charities Act 2011 from either the court or the Charity Commission in circumstances where the Charity Commission would face an actual or apparent conflict of interests if asked to give such authorisation.
- That the Charity Commission should not be required to obtain the Attorney General’s consent before making a reference to the Charity Tribunal, but that the Charity Commission and the Attorney General should be required to give the other four weeks’ advance notice of any intended reference.
When will the changes come into force?
In the recent Queen’s Speech, the Government announced that it would be introducing a Charities Bill to bring into force the changes to these troublesome technical points of charity law which are particularly incongruous or difficult for trustees to navigate. Given that the Government had previously been vague about the timing of this legislation, the sector will be pleased to hear that the amendments are now a legislative priority. The Charities Bill was introduced to Parliament on 26 May 2021.
For more information
If you have any questions or would like assistance or advice regarding anything covered by this ebriefing series, please contact Catherine Gibbons.
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