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How Does the New Charities Act 2022 Affect Your School?

on Tuesday, 17 May 2022.

The new Charities Act 2022 recently received Royal Assent. The changes are wide-ranging and focus on reducing the regulatory burden of certain administrative charity rules to help charities run more smoothly.

Most of the changes will be brought into force gradually between now and autumn next year to allow the Charity Commission time to ensure accompanying guidance is up-to-date and its staff are trained and ready for the changes.

We outline the key changes which we think will be most relevant to schools below.

Simplifying the Process of Amending Governing Documents

Different rules will now apply to charities who want to change their governing documents. If you haven't reviewed your school's governing document recently, now may be a good time to do so.

The effect of the changes will differ depending on your school's legal form. If your school is unincorporated or governed by a Royal Charter, you may find it easier to make changes. If your school is a company and you were thinking about changing the school's charitable objects, you may soon find it more difficult to do so.

Greater Choice of Advisers When Obtaining Advice Required when Selling or Dealing with Property

Under the new Act, schools will be able to rely on a wider pool of advisers when obtaining advice on a disposal of property. The Act also clarifies that certain short, fixed-term tenancies to staff no longer require Charity Commission consent.

If you have any concerns relating to your school's compliance with the new rules, please contact our specialist Schools Real Estate team. This change will be particularly welcome by schools with property portfolios.

Greater Flexibility to Use 'Permanent Endowment' Funds

The new Act makes it easier for schools to make use of permanent endowment funds. One particular change which may be of interest to schools in the current climate is the introduction of a power to borrow up to 25% of the value of permanently endowed funds (without Charity Commission approval) as long as it is paid back within 20 years.

Policy Tracker Staff up to date

For specialist guidance on the impact the changes will have on your school, please contact Kenji Batchelor in our Schools team on 07384 251898, or complete the form below.

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