Explanatory Note
(This note is not part of the Regulations)
These Regulations are the first commencement regulations made under the Charities Act 2022 (c. 6) (“the 2022 Act”).
Regulation 2 defines general terms which are used in the Regulations.
Regulation 3 brings into force a number of sections of, and paragraphs of Schedule 2 to, the 2022 Act, listed in the Schedule, which implement recommendations made by the Law Commission of England and Wales as to technical improvements that could be made to charity law. Many of these improvements are made by way of amendment of the Charities Act 2011 (c. 25) (“the 2011 Act”).
Regulation 4 revokes regulation 61(4) of the Charitable Incorporated Organisations (General) Regulations 2012 (SI 2012/3012), which automatically provided trust corporation status to Charitable Incorporated Organisations. This change is consequential upon the commencement, by regulation 3 and paragraph 9 of the Schedule, of section 32 of the 2022 Act (trustees of charitable trust: status as trust corporation), which renders regulation 61(4) no longer necessary.
Regulation 5 makes saving provision in relation to property provided for charitable purposes which fail (“the property”). This is to ensure that where trustees of charities have commenced steps currently required under sections 63 and 65 of the 2011 Act and the Charities (Failed Appeals) Regulations 2008 (“the 2008 Regs”) in relation to the property before section 6 of the 2022 Act is commenced (which repeals sections 63 to 65, revokes the 2008 Regs and inserts new section 63A of the 2011 Act), those provisions will continue to apply in relation to the charity trustees in respect of the property and to the donors of the property rather than new section 63A.
In addition, where the trustees of charities have made an application to the Charity Commission for an order to be made under section 69(1)(a) of the 2011 Act for a scheme applying the property cy-près, the Charity Commission has made or refused to make an order under section 69(1)(a) following such an application, or legal proceedings have been brought in relation to any such decision of the Charity Commission, sections 63 to 65 will continue to apply.
In consequence, regulation 5 ensures that changes to remove references to sections 63 to 65 from section 66 of, paragraph 7 of Schedule 8 to, and Schedule 11 to, the 2011 Act (made by paragraphs 13 to 15 of Schedule 2 to the 2022 Act) do not apply until such time as sections 63 to 65 cease to apply to the charity in respect of the property and the donors of the property.
Paragraph 1 of the Schedule brings into force section 4 (power to amend Royal charters), which inserts a new section 280C into the 2011 Act providing charities established or regulated by Royal charter with a new statutory power to amend their Royal charter. The power is exercisable by resolution and subject to the approval of His Majesty in Council.
Paragraph 2 of the Schedule brings into force section 5 (orders under section 73 of the 2011 Act: parliamentary procedure), which amends section 73 of the 2011 Act so that all orders made under that power are subject to the negative parliamentary procedure.
Paragraph 3 of the Schedule brings into force section 6 (cy-près powers), which inserts a new section 63A into the 2011 Act to replace the current regime for dealing with property given for charitable purposes which fail (sections 63 to 65 of the 2011 Act, which are repealed, and the 2008 Regs, which are revoked).
Paragraph 4 of the Schedule brings into force section 7 (proceeds of fund-raising: power of charity trustees to apply cy-près), which inserts new section 67A into the 2011 Act to give charity trustees a new power to apply property raised via a fundraising appeal cy-près without the need for an order of the Charity Commission under section 69(1)(a) of the 2011 Act.
Paragraph 5 of the Schedule brings into force section 8 (power of the court and the Commission to make schemes), which inserts a new section 75A into the 2011 Act. New section 75A confirms that the power of both the court and the Charity Commission to make schemes extends to charitable companies. Schemes are legal arrangements that change or supplement the provisions that would otherwise apply in respect of a charity or a gift to charity. This power is treated as always having had effect so as not to cast doubt on the validity of any scheme made before the commencement of section 8.
Paragraph 6 of the Schedule brings into force section 30 (remuneration of charity trustees etc providing goods or services to charity), which amends section 185 of the 2011 Act to allow charities to now pay trustees for goods, as well as services, provided that the conditions set out in section 185 are met.
Paragraph 7 of the Schedule brings into force section 32 (trustee of charitable trust: status as trust corporation), which provides automatic trust corporation status to bodies corporate, such as charitable companies or Charitable Incorporated Organisations, when they become trustee of a charitable trust. This will allow the body corporate to deal with land held for the purposes of that charitable trust as a sole trustee.
Paragraph 8 of the Schedule brings into force section 36 (costs incurred in relation to Tribunal proceedings etc), which inserts a new section 324A into the 2011 Act. This will provide the Charity Tribunal (both the First-tier Tribunal and Upper Tribunal) with the power to make orders authorising charity trustees to incur legal costs in relation to legal proceedings and confirming that such costs are a proper use of the charity's funds.
Paragraph 9 of the Schedule brings into force section 37 (public notice as regards Commission orders etc), in part. This section makes amendments to section 337 of the 2011 Act by inserting new subsections (2A), (3A) and (3B). The effect of subsection (2A) is to confirm that where an application for an order from the Charity Commission is made, the Charity Commission may give prior notice of the proposed order. The effect of subsections (3A) and (3B) is to extend the power to give notice (both prior to and after) of the giving by the Charity Commission of written consent. In both cases, the Charity Commission can require the charity which has applied for the order or written consent to give notice (in place of the Charity Commission).
Paragraphs 10 and 11 bring into force section 40 and a number of paragraphs of Schedule 2 (minor and consequential provision), which make consequential provision relevant to the other sections of the 2022 Act commenced by these Regulations.
A de minimis impact assessment has been published on gov.uk alongside the 2022 Act at
https://www.legislation.gov.uk/ukpga/2022/6/pdfs/ukpgaod_20220006_en.pdf
The consequential and saving provisions in these Regulations do not materially change that assessment.