The return of the Parthenon Marbles? New ex gratia payment regulations for charities

Posted: 27/11/2025

Regulations came into force today which bring some welcome clarity to charities wishing to make what are known as 'ex gratia' payments. This article covers examples of ex gratia payments and explains the new rules and the circumstances in which they do and do not apply.

What does this relate to?

Essentially, charities must only spend their money in ways which promote their charitable objectives. That may sound sensible, simple and straightforward, but this simplicity can cause problems in a sector that often has strong moral and ethical considerations which underpin its decision-making around expenditure.

What sort of problems can arise?

One example of a problem is when a charity receives a legacy in a will but, because of a quirk of events, the deceased person's family is accidentally disinherited. This has formed the basis of the rules around when charities may make payments to individuals or other causes that are not in their charitable objects. It is not promoting a charity's objects to pay the family of a deceased person when the charity has accidentally inherited most or all of their wealth, but there are strong moral and ethical points to consider.

Similarly, trustees of a museum which holds artefacts from another country that were obtained in dubious circumstances have recently been facing similar dilemmas. Trustees may feel a strong moral obligation to return those artefacts, let alone the strength of public opinion which could impact the charity's reputation. This is a live consideration for many museums, galleries and other charities with collections of difficult provenances.

There are other charities which may reasonably regard their role within the communities they serve as conferring an obligation on them to make charitable donations for other reasons. This could include, say, the trustees of a prominent local charity wishing to make donations to a community group supporting the homeless. It may not be within their charitable objects to support the homeless and yet their position within their communities may mean there is a strong moral obligation to provide assistance, for example by providing financial support to a soup kitchen. 

The new Charity Governance Code (in force from 3 November 2025) notes that it is an indication of good governance that trustees are sensitive to the ethical, social and environmental consequences of their decisions, but it is essential that this is not conflated with a sense that moral arguments take precedence over the need to comply with the charity's objects. Trustees must tread carefully.

What are the new rules?

In summary, the amount a charity can pay ex gratia without the Charity Commission's permission will now be set against the charity's income in the previous financial year, as follows:

Legal tests must still be met, so the charity trustees must:

• have no legal power (other than under these provisions) to take action; and
• in all the circumstances be reasonably regarded as being under a moral obligation to take that action.

If these tests are met and the value of the payment or gift is within the new thresholds, then charity trustees will be empowered to make the payment without reference to the Charity Commission, the courts or the Attorney General. However, our advice remains that extreme caution must be exercised since the starting point must be that a charity should follow its objects. It must only stray outside those objects because the trustees feel a strong moral pressure to do so. It is not simply a sense that it would be good to be able to make a payment; it is a far higher bar.

The explanatory note to the regulations bringing these new provisions into force explains that the standard of decision-making is an objective one. This means that the decision as to whether there is a moral obligation to take action does not need to be a decision of the trustees themselves. This clarifies that decisions relating to ex gratia payments could be delegated to a committee or other group within the charity. Trustees should however note that they remain ultimately responsible for any decisions made and there should be appropriate oversight of any delegated decisions, especially as these changes are adopted.

Will this apply to all charities in all circumstances?

In short, no. There are several charities which have specific collections or property of national significance which are excluded from these provisions. This includes the British Library, British Museum, Tate Gallery, National Portrait Gallery and 12 others, so these provisions will not themselves enable the return of the Parthenon Marbles. Or, at least, not without scrutiny from the Charity Commission, the Attorney General or the courts, and, most likely, Parliament.

If you would like to discuss the rules around ex gratia payments, please contact Virginia Henley, Rachel Spruce or your usual Penningtons Manches Cooper charity contact.

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