Ex Gratia Payments by a Charity

Guidance Note on Ex Gratia Payments by a Charity

Our Charity & Non-Profit Group now includes a new Guidance Note: Ex Gratia Payments by a Charity which you can find in the Charity Administration (Ongoing and Start-up) Documents subfolder.

This guidance applies to any and all charities, irrespective of their size, type or legal form. We have added this document in order to help charity trustees and administrators understand how to comply with the law relating to the making of “ex gratia” payments by a charity.

What is Meant by “Ex Gratia”?

This new note explains what is meant by the term “ex gratia”, and also how the law regulates not only ex gratia payments of funds by a charity but also any ex gratia transfer of any property or assets, and any waiver/transfer of any rights to another person or organisation.

Proposed Changes

The Law Commission has recently proposed changes to the law on ex gratia payments by charities, and so we have taken the opportunity to include an outline of the proposed changes in this guidance note. (The changes would to an extent reduce the current legal regulation of ex gratia payments/transfers/waivers). We expect the Law Commission’s proposals to be implemented in full (without any significant change) although it is not possible at present to estimate when the changes will be enacted.