Eagerly awaited Charities Act 2022 receives Royal Assent

The Charities Act 2022 became law as of 24 February 2022.

The long-anticipated Charities Bill has finally become the Charities Act 2022, having received Royal Assent on 24^th February 2021. The new law will bring a range of much-needed technical changes to the law.

What will the Charities Act do?

The Charities Act is intended to create opportunities for charities, which will be particularly helpful for those which have retained ‘shell’ charities after a merger or incorporation to protect future  legacies.

The Charities Act makes a lot of technical changes to the law, but key highlights include changing: 

• the law on amending governing documents for all types of charity (so care will need to be taken in making the changes: some changes will be easier but some changes which were not regulated before now will be); 

• the process charities have to go through to dispose of land, simplifying the advice they need to receive; 

• the ‘permanent endowment’ regime, to give a little more flexibility (and clarity); 

• the provisions allowing payments to trustees to include payments for goods (not just those provided with a service); 

• the provisions dealing with failed appeals, to simplify the rules and make them slightly easier to follow; 

• the law relating to trust corporations, so that incorporated charities will automatically be treated as trust corporations rather than needing the involvement of the Charity Commission or the Ministry of Justice (which will help with changing trustees in some circumstances).

When will the Act be implemented?

At present, information as to when changes will be implemented is limited, but we expect it to be staggered over the next 12 to 18 months or so. The Charity Commission have commented that:

“We will not be able to make all of the necessary changes in one go - not least because some of the changes require secondary legislation and others changes to our systems and processes. We have developed a plan that will see us aiming to gradually implement the changes between now and the autumn of 2023 (not all the provisions though are dependent on the Commission and may be brought into force earlier).”

This will be something for charities and advisors to keep an eye on in the coming months.