Guidance Note: Ex Gratia Payments by a Charity

This Guidance Note: Ex Gratia Payments by a Charity outlines the law and practice on “ex gratia” payments by a charity to any person or organisation. It takes account of changes to the law made by the Charities Act 2022 effective as from 27 November 2025. We urge all charity trustees and administrators to familiarise themselves with this guidance. 

The note:

• applies to any and all charities, irrespective of their size, type or legal form. 
• is intended to help trustees decide whether it will be lawful to proceed with any proposal by the charity either to pay any sum or to transfer any property or assets or waive/transfer any rights to another person or organisation.
• explains the steps trustees need to take before they proceed with such a proposal.
• explains the kind of payment of funds, transfer / waiver of property / assets, or transfer / waiver of rights that constitutes an ex gratia payment, transfer or waiver.
• outlines how ex gratia payments differ from other types of payment, transfer or waiver.
• gives typical examples of “ex gratia” payments.
• explains that trustees may, as a result of the Charities Act 2022, delegate to charity staff the power to decide to make an ex gratia payment.
• explains where you do and do not need to involve the Charity Commission before making an ex gratia payment.
• explains how the changes to the law on ex gratia payments made by the Charities Act 2022 reduce the regulation of ex gratia payments/transfers/waivers. 

As indicated in the guidance, charity trustees should seek legal advice before making any payment or taking any other step to ensure that any proposal can be lawfully implemented, and to ensure that it is carried out in accordance with the law.

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