Charity trustees in England and Wales now have new legal powers when considering moral payments: payments made because there is a moral rather than strictly legal obligation to transfer some of a charity’s property.

This is the final provision in Charities Act 2022 to come into effect.

Few charities encounter situations where a moral payment is relevant. Typically, these arise in cases involving legacies where there is evidence that a person’s will does not reflect their final wishes.

Key Changes to Moral Payments

The Charity Commission has updated its guidance to help trustees navigate these changes. The main changes, which came into force on 27 November 2025, are:

  • Objective legal test: Previously, trustees needed to personally feel a moral obligation (a subjective test). The law now requires an objective assessment -of whether trustees can reasonably be seen as being under a moral obligation.
  • Self-authorisation: Charities may make small moral payments without needing the Commission’s approval, provided they meet certain criteria.
  • Scaled financial limits: The maximum amount a charity can pay without Charity Commission approval is based on the charity’s gross annual income from the previous financial year. Payments above this threshold still require approval.
  • Delegation of decisions: Trustees may delegate moral payment decisions to staff or committees, although they retain ultimate responsibility for the decision.

Practical Implications for Trustees

  • The availability of these new powers depends on the individual charity and the proposed payment. Some charities, particularly national museums and galleries, are prevented from making moral payments by their governing document or other legislation.
  • Trustees cannot apply these powers retrospectively. Applications for approval to make a moral payment that have already been submitted will be considered under previous legislation.
  • When necessary, trustees should seek Charity Commission consent. The Commission will continue to evaluate applications on a case-by-case basis, checking that reasonable decisions have been made and legal obligations met.

Commission Guidance

Christine Barker, Head of Regulatory Authority at the Charity Commission, said, “Few charities ever face decisions over ex gratia payments, but for those that do, these legislative changes provide greater clarity and flexibility and allow them to make in-house decisions for small sums. Our updated guidance is designed to help charity trustees know how to apply the law and whether they need to apply for our permission.”

The Charity Commission has encouraged trustees to refer to its general guidance on decision-making (CC27) when considering a moral payment.

See: https://www.gov.uk/government/news/regulator-updates-guidance-after-legislative-changes-on-moral-payments