UK Government responds to Law Commission's 'technical Issues' in charity law report

The government has given its long-awaited response to Law Commission report ‘Technical Issues in Charity Law’, which was published in September 2017. It is likely that the context of the pandemic has played a significant part in drawing the government’s attention to the report.
The implementation of the recommendations will reduce some of the administrative burdens of charities and the Charity Commission at a time when resources in the sector are extremely stretched.
The response does not provide any indication of when the recommendations will be implemented, stating that it will be ‘when Parliamentary time allows’. The process of passing a Charities Bill could be dealt with using a special procedure for Law Commission bills and so time may be found sooner rather than later.
Although the government has not agreed to all the recommendations, the changes will still be the most significant to charity law since the Charities Act 2006.
We consider the following to be the key changes for charities to be aware of:
The government has not agreed to all of the anticipated changes however. For example, the Law Commission recommended that wholly owned subsidiaries be excluded from the definition of a ‘connected person’ for the purposes of disposing of charity land. The government did not accept this on the basis that charities often fail to deal with subsidiaries at an arms’ length and so the safeguard of Commission permission should be kept in place. The government also did not agree to review the basis on which decisions of the Charity Commission can be challenged and who has the particular rights of challenge.
The changes are significant and it is hoped they will make the operations of charities easier in many cases. We will be providing further updates on this topic when a timeline for the changes becomes clearer.
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