Government releases draft legislation for statutory definition
of charity - Start date deferred to 1 January 2014
As part of the wider Not-for-profit reforms, the Government has
proposed the introduction of a statutory definition of charity.
Following consultation in 2011, the Treasury released the draft
legislation yesterday. The government intends to introduce the bill
into the winter sitting of Parliament.
Click here for a copy of the exposure draft and exploratory
The draft legislation seeks to incorporate the common law
definition along with the definitions included in the Extension of
Charitable Purpose Act 2004.
Key highlights include:
The new legislation will have a start date of 1 January 2014 (6
month deferral). The presumption of public benefit will be retained
for relief of poverty and the advancement of religion and
education. The relief of poverty is to be incorporated into a new
charitable purpose - advancing social or public welfare.
There are a range of other proposed amendments that include the
ability for ancillary funds to donate to charity like government
entities and the expansion of the number of sub type registrations
from 6 to 14.
The explanatory memorandum provides a significant level of
description as to the government's view as to what is a charity
under each of these new categories which requires further
Under the proposed legislation, there is no grandfathering of
charitable status and there is a clear requirement for charities to
assess their status on an ongoing basis. The government has
indicated that this definition is not intended to narrow the
existing charity definition but has acknowledged that there will be
a need for some charities to register as different sub types and
potentially amend their governing rules to satisfy the new
requirements. There is a proposed transitional period of 18 months
for existing charities to make the necessary changes to amend their
The consultation period for the draft legislation closes on 3
May 2013. As part of our commitment to the not-for-profit sector,
and to assist our clients in having a forum to express their views,
Moore Stephens will be making a submission. To this end, we are
seeking client input for our submission and request that you
provide your comments to firstname.lastname@example.org.
On 12th November 2016, new laws will commence to protect small businesses from unfair terms in standard form contracts.
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