The Charity Commission has published new regulations and guidance for Trustees on adopting a total return approach to the investment of their charity’s permanent endowment. This new legislation will make amends to the Charities Act 2011, and these changes will come into effect from 1 January 2014.
The new legislation allows trustees of permanently endowed trusts to adopt a total return approach to investment without seeking prior permission from the Commission.
For permanently endowed Charities a total return approach means that all investment returns received are treated as a whole, not labelled as ‘capital’ or ‘income’ as they otherwise would be.
Trustees of these Charities will be able to allocate the total return in the way they think will benefit their charity the most in achieving their current and future aims. The regulations aim to ensure that safeguards are in place to respect the principle of permanent endowment while allowing trustees to use this new approach when managing their new investments.
For more information and advice on the new legislation, please contact Simon Brown on 0191 285 0321 or email firstname.lastname@example.org.