Charities Act 2022 provisions to be introduced in Spring 2023

The Charity Commission has released new guidance on the further changes to be introduced by the Charities Act 2022 (the 'Act') this spring.

A number of the provisions of the Charities Act 2022 have already come into force (please see our previous articles here and here) including amendments focused on the remuneration of trustees for providing services or goods to charities; dealing with surpluses or deficits in funding; and charities' powers to amend royal charters.

This spring (on a date to be confirmed) the next tranche of the Act's provisions will be brought into force - these include revised rules on the disposal of charity land (sections 17-23), charity names (sections 25-28), updates to the definition of 'connected persons' (sections 38 and 39) and provisions dealing with the use of permanent endowment (sections 9-14 and 35a).

The changes to the rules relating to the disposal of land will allow for a wider category of designated advisers to assist charities undertaking disposals. The permitted class of advisers will include trustees, officers or employees of a charity where relevant requirements are met. Furthermore, trustee discretion in deciding how to advertise a proposed disposal of charity land will be widened. Legal requirements for selling or leasing charity land to another charity will be clarified; and charities will no longer require Charity Commission authority to grant residential leases to charity employees for short or fixed terms.

The introduction of the Act's provisions relating to charity names will allow the Charity Commission to direct charities to refrain from using a working name, where it is too similar to the name of another charity, or is offensive or misleading. In addition, the Commission may delay registration of charities with unsuitable names.

There will also be changes in relation to permanent endowment, allowing charities to spend £25,000 or less from smaller value endowments without Charity Commission authority, subject to conditions; and certain charities will be allowed to borrow up to 25% of their permanent endowment fund without Commission authority. Charities that have adopted a total return approach to investment will also be permitted to use permanent endowment to make social investments with a negative or uncertain financial return, provided any losses are offset by other gains.