Charities Act 2011 Provisions Coming into Force 7 March 2024

The Government has confirmed that the third set of changes to the Charities Act 2011 will come into force on 7 March 2024.  The latest provisions include:

Charity Governing Documents

• The Charity Commission must consider new criteria when reviewing applications for consent to change the objects of charitable companies and CIOs. Amongst other things, The Charity Commission will consider the purposes of the charity when it was established.
• Charitable companies and CIOs will be brought on a par in terms of the provisions governing making regulated alterations to their Articles and Constitutions. This provides for resolutions amending CIOs’ Constitutions to take effect on the date that the resolution making the amendment is passed or on a later date stated in the resolution (subject to an exception for changing the CIO’s objects which will only take effect when or after it is approved by The Charity Commission – subject to the wording of the resolution).
• Unincorporated charities will be given a general statutory power to amend their Constitutions provided they obtain The Charity Commission’s consent for significant changes. The Charity Commission’s consent will be required for changing the charity’s objects, trustee benefit provisions and provisions directing the application of the charity’s remaining assets upon winding-up or dissolution.

Register of Mergers

• To introduce provisions to reduce the need to retain dormant charities on the Register post-merger to ensure that specific types of legacy income do not inadvertently fall through the net. Gifts will take effect to the new charity even if the former charity no longer exists and the gifts are expressed to take effect only if the charity continues to exist on the date the gift takes effect.

Land Disposals

• The exceptions to the general restrictions on disposing of interests in charity land have been amended. Changes to the information that must be included in documentation for disposing of interests in charity land have also been changed. The wording has been clarified so that the exception for disposals to another charity will only apply in circumstances where the disposal of the interest in land is intended to further the transferring charity’s objects. It therefore clarifies that the exception does not apply to market rate transactions that are intended to achieve the best price or value for the transferor charity.
• The requirement for the trustees to advertise a proposed disposal of an interest in charity land in the manner advised in the advisor’s written report has been removed and hash been replaced with a requirement for the adviser to ensure the Report contains such information as may be prescribed by subsequent regulations.
• The definition of a ‘connected person’ for the purposes of the Charity Land Disposal Rules has been amended to specifically exclude charity employees where the charity is granting a short, fixed-term or periodic tenancy of one year or less to use as the employee’s home. Therefore, trustees will still need to obtain written advice prior to granting tenancies to charity employees, but Charity Commission consent will no longer be necessary.

Trustees

• The Charity Commission has obtained a useful new power to ratify the appointment of charity trustees if there has been a defect in the process of their appointment or uncertainty about whether they were correctly appointed in the first place.

Failed Fundraising Appeals

• If a purpose in connection with a fundraising appeal can no longer be carried out or fulfilled simpler rules have been implemented that enable the funds raised to be applied for another charitable purposes that are similar to the original purposes rather than having to return funds to donors. The scenarios in which this can happen would be where it is unreasonable for the charity to go to significant expense to return the donations, unreasonable for donors to expect their donations to be returned, the donation is £120 or less and if donors cannot be identified or found.