The Charities Bill: proposed key changes to charity law

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The Charities Bill, announced May 2021, proposes important changes to charity law to simplify processes for charities, subject to the approval of Parliament:

  • charities and trustees will be able to amend their governing documents more easily – remaining subject to the Charity Commission’s approval in certain circumstances. This will reduce inconsistency by aligning amendment mechanisms for incorporated and unincorporated charities.
  • charities will have access to a wider pool of professional advisors on land disposal, and more straightforward rules on advice they must receive, saving time and money when selling land.
  • charities will have more flexibility to make use of a ‘permanent endowment’ – money or property originally meant to be held by a charity forever – including allowing trustees to borrow up to 25% of its value, and make certain social investments, without the Charity Commission’s approval.
  • charities will be able to use simple, more proportionate rules on failed appeals. For example, if an appeal raises too little money, donations below £120 can be spent on similar charitable purposes without needing to contact donors for permission (known as applying cy-près).
  • charities will be able, where appropriate, to more easily perform mergers, allowing legacies in wills to be transferred to a merged charity, removing the need for and cost of “shell charities”.
  • the Charity Commission will have additional powers to authorise charities to pay an equitable allowance; require charities to change/stop using inappropriate names; and ratify the appointment/election of trustees where uncertainty exists over the appointment/election’s validity.
  • certain powers of the Charity Tribunal will be improved and clarified.
  • corporate charities will be given “trust corporation status” automatically if they administer charitable trusts.
  • new “authorised costs orders” will provide advanced assurance that the costs incurred by trustees can properly be paid from the charity’s funds.
  • trustees will be able to be paid for goods provided to a charity, even if not expressly stated in the governing document (currently they can only be paid for services), allowing charities to access goods from trustees when in the charity’s best interests (e.g. if cheaper).
  • trustees will be able to be paid ‘equitable allowances’ for exceptional skill and effort with which they have carried out work for their charity, where it would be unjust not to do so.
  • charities will be able to make relatively small ex gratia payments, and delegate the power to make those payments to an appropriate person within the charity.


This is a synopsis of the Charities Bill Factsheet – GOV.UK ( and

The Charities Bill: 5 key changes to charity law – Charity Commission (