Update: Introduction of Charities Act 2022 provisions this month

As we reported in last month's e-alert, the Charity Commission has released new guidance on the further changes to be introduced by the Charities Act 2022 (the 'Act'). The provisions of the Act that came into force on 14 June 2023 include the changes to the use of permanent endowment (sections 9-14 and 35(a)), legal requirements for the disposal of charity land (sections 17, 19-22), charity names (sections 25-28), an update on the definition of connected persons (section 38 and 39), and minor and consequential amendments (part of Section 40 and Schedule 2) will be implemented by the end of June 2023.

By way of recap, the key details of these new changes are as follows:

• Statutory powers for the use of permanent endowment will allow charities to spend £25,000 or less from their permanent endowment fund without permission from the Charity Commission. In addition, certain charities will be able to borrow 25% of their endowment fund without Commission authority.
• Selling, leasing, or disposing of charity land under the act will provide charities with simplified legal requirements. As of the end of June, trustees are granted discretion over how to advertise the disposal of charity land and may now take part in providing advice on such disposal.
• The Commission will be granted powers to delay the registration of a charity if its name is misleading, offensive, or similar to another charity’s name.
• The current definition for ‘connected persons’ will be updated to remove outdated language. 

It is currently intended that other changes made to the Charities Act 2022 will be put into effect by the end of 2023. Some of the future provisions of the Act include amendments to charity constitutions, powers relating to appointments of trustees, and charity mergers. 

The gov.uk webpage setting out the implementation plan for the Charities Act 2022 notes that the changes to ex-gratia payments (section 15 and 16) are  still "under further consideration prior to commencement".