Guidance

How charities can make a moral, or ‘ex gratia’, payment (CC7)

Updated 27 November 2025

Applies to England and Wales

• Publication for Northern Ireland
• Publication for Scotland

Charities can only spend their funds and property on furthering their charitable purposes in ways set out in their governing document. But there may be times when trustees feel they have a moral obligation to:

• pay money out of the charity’s funds, or
• transfer charity property, or
• waive a right to money or property to which the charity is legally entitled, but has not yet received

For ease this guidance refers to these scenarios as making a ‘moral’ payment or an ‘ex gratia’ payment.

A moral payment is one that the trustees could reasonably be regarded as being under a moral obligation to make, but where:

• they are not under any legal obligation to do so
• the charity’s governing document does not have any powers which can be used to make it

• there are no other legal powers which the trustees can use, and

• the trustees cannot justify it as being in the best interests of the charity

You can make these payments, providing you meet the following legal conditions. You must:

• make sure that the person making the decision has authority to do so
• be satisfied that the trustees could reasonably be regarded as having a moral obligation to make the payment, and
• obtain Charity Commission authority where it is needed

You should take professional advice if you are unsure whether your charity can make a moral payment.

There is a restriction that applies to 16 statutory charities, mainly national museums and galleries, that are listed in section 6 of this guidance. 

A payment that you consider is in your charity’s best interests is not a moral payment. There is a different way to apply for authority for these types of payments.

1. When you may want to make a moral payment

The basis for making a moral payment is that the charity has been ‘unjustly enriched’ and the trustees wish to make a payment, even though there is no legal obligation to do so. Put simply, the test is whether the trustees could reasonably be regarded as being under a moral obligation to make the payment.

1.1 Moral payments connected with wills and legacies

These can occur when your charity receives a legacy but there is evidence that the donor had changed their mind since making the will.

For example, someone leaves money in their will to named grandchildren and a charity. They change their will to include a new grandchild but die before signing it. The charity wants to honour the will-maker’s intention by giving some money to the additional grandchild.

Your charity is required to keep all legacies it receives. But you can make a moral payment out of your charity’s share, so that an individual receives what the deceased intended them to have, if:

• there is clear evidence of the deceased’s intentions, and
• you are satisfied that the trustees could reasonably be regarded as being morally obliged to make the payment

1.2 Other moral payment scenarios

Similar moral considerations can arise in other situations.

For example: a person donates money to a charity believing that they can afford it. Later, they realise that they cannot and suffer financially. They write to the charity asking for their donation to be returned. The trustees may reasonably be regarded as being morally obliged to return all, or part, of the donation, having considered the evidence.

2. Delegating trustee authority to make decisions

As trustees you can delegate your authority to others in your charity to decide whether trustees could reasonably be regarded as being under a moral obligation to make a payment.

But you and the other trustees remain ultimately responsible for all decisions that are made.

The most appropriate person or group will depend on your charity’s circumstances.  For example, you may choose to delegate decision-making to:

• a sub-committee of trustees
• the chief executive
• a legacy officer
• another employee

You may choose to limit your delegated authority. For example, you may:

• limit the total value of moral payments that the person or group with delegated authority can make each year
• only delegate decisions that do not need Commission authority
• only delegate decisions which are not high risk or novel

You should:

• record the decision to delegate, noting who the delegate is
• give them terms of reference that set out what they can and cannot do
• have clear and robust reporting and review procedures

This helps ensure that delegates apply the legal test and exercise their authority properly.

3. Deciding if trustees have a moral obligation

Read section 1 to understand what a moral payment is.

Consider a request or proposal to make a moral payment carefully. You are not under any legal obligation to make this type of payment and, if you do, it will mean you cannot spend that money on your charity’s purposes.

You, or those with delegated authority, must be satisfied that the trustees could reasonably be regarded as being morally obliged to make the payment.

The examples in section 9 may help you understand the sorts of scenarios that could give rise to trustees feeling a moral obligation.

You should take legal advice if you are unsure.

You must comply with your trustees duties when making decisions.

3.1 For will or legacy cases

You should assess whether the will accurately represents the deceased’s intentions.

You should also take into account that:

• anyone who makes a will has the right to give away their money or possessions to whomever they want
• disappointed relatives are not enough on their own to justify a moral payment

Where it is claimed that circumstances have changed since the will was made, or the deceased may have tried to make a new will before they died, you should consider:

• the wording of the will
• any evidence of the deceased’s true intentions. This may include a draft will, an unexecuted codicil, or a written statement from an independent person, such as a solicitor
• any evidence of why the deceased could not validly update their will, such as sudden illness, and what opportunities there may have been to do so that were not taken. This could be a written statement from an independent person such as a solicitor

A statement by a person who believes they are morally entitled to a share of a will is not normally enough on its own to demonstrate that the trustees have a moral obligation. This is because it is not impartial evidence. However, if no stronger evidence is available, it may be enough if supported by a statutory declaration. This is a formal statement which affirms that something is true to the best knowledge of the person making the declaration. The statutory declaration will need to be signed in the presence of a solicitor, commissioner for oaths or notary public. You should take professional advice if you are not sure whether a statutory declaration may be required.

3.2 For other cases

You should consider appropriate evidence. In the example of a donor’s situation changing, you should consider evidence from:

• the donor, explaining how and why their circumstances have changed. It may be that making the gift in the past has created financial difficulties in the present
• third parties. For example, a doctor’s note saying that the donor’s health has deteriorated so that they are no longer able to work

In all cases, you may consider returning some, or all, of the gift.

3.3 Recording your decision

You, or those with delegated authority, should clearly record your decision with the reasons for making it, including all the evidence and factors that were considered. If the decision is made by:

• the trustees, they should record that they reasonably regard themselves as being under a moral obligation to make the payment. This decision should be recorded in a trustee resolution or the minutes of your trustee meeting
• those with delegated authority, they should record that they believe the trustees could reasonably be regarded as being under a moral obligation to make the payment. They should share the record of the decision with the trustees as part of your arrangements for reporting and accounting

4. Check whether you need Charity Commission authority

Charities have a legal power to make a moral payment, without Charity Commission authority:

• if they aren’t restricted from doing so by their governing document
• if it falls within set payment limits (explained below) and
• if the legal tests set out above are met

A restriction on using this power applies to the 16 statutory charities (mainly national museums and galleries) that are listed in section 6 of this guidance. If you think this could apply to your charity, read this section.

4.1 Check your charity’s governing document

You must apply for Commission authority to make a moral payment if your governing document:

• states you cannot make this specific type of payment, or
• restricts the use of your power to make these payments and you want to act outside of that restriction

If your governing document contains a general restriction – such as ‘only apply the income and property in furtherance of the charity’s purpose’ – this does not prevent you from using the legal power to make moral payments explained in this guidance.

If you are a trustee of one of the 16 statutory charities in section 6, this paragraph does not apply to your charity.

4.2 Check the amount of the payment

You can make an individual moral payment up to the maximum value set out in the table below without Commission authority. The maximum value depends on your charity’s gross annual income for the last financial year.

Charity’s gross income in its last financial year	Maximum individual payment allowed without Commission authority
£0 to £25,000	£1,000
£25,001 to £250,000	£2,500
£250,001 to £1m	£10,000
Over £1m	£20,000

If the moral payment you wish to make exceeds the amount set out in the table, you must apply for Commission authority before you make the payment. 

The maximum individual payment amount means the total value of the moral payment you wish to make in each case. You cannot split a moral payment to avoid applying to the Commission for authority.

For example, if your charity’s annual income was below £25,000 in the previous year and the trustees wished to make a moral payment of £2,000 to one person, they could not make two separate payments of £1,000 to fall within the maximum allowed.

5. Apply for Charity Commission authority

Trustees, those with delegated authority, or their representatives can submit the online application. You cannot apply if you will benefit from the moral payment.

You’ll need to provide:

• details of the proposed moral payment
• full names of who you want to pay
• a detailed statement setting out why the trustees could reasonably be regarded as being under a moral obligation to make the payment including all the evidence and factors they have considered
• if the decision was made by the trustees, include the resolution passed by them (this can be set out in trustee minutes) which sets out that they feel they could reasonably be regarded as being under a moral obligation to make the payment
• if the proposal is to pay part of the amount received, an explanation of why the full amount is not being paid
• any legal advice you received if you can share this

For will cases you also need to provide:

• a copy of the signed will and grant or certificate of probate
• any draft, or unexecuted, wills and codicils
• evidence that the will does not match the deceased’s intentions or that their wishes could not be carried out. For example, a statement by an independent person

For other cases:

• information about why a moral payment is considered appropriate
• appropriate evidence to support the decision, for example explaining how the donor’s circumstances have changed (if applicable)
• evidence from others supporting the claim, for example a statement by an independent person

The files must be in PDF format, and each file can be no bigger than 10MB.

Apply for Charity Commission authority to make a moral payment

5.1 What happens next

If the Commission gives its authority, you should keep a copy of the order as part of your charity’s records. This is evidence that the payment was authorised.  It may be needed by your charity’s auditor or independent examiner.

5.2 Reference to the Attorney General

In a very limited number of cases, the Commission will refer the moral payment application to the Attorney General to make the decision directly.

5.3 If the Commission refuses your application

You can appeal the Commission’s decision to the First-tier Tribunal (Charity).

Or you can:

• apply directly to the Attorney General for authority: ago.correspondence@attorneygeneral.gov.uk
• apply to the court for approval. This would fall under the definition of ‘charity proceedings’ within the Charities Act 2011 and you need an order from the Commission to do this. You can apply to the court for an order if the Commission refuses to make one

6. Extra guidance for statutory charities

Statutory charities can make moral payments in the way described in this guidance.

However, the following 16 charities cannot under the law transfer certain property using the moral payment power:

• The Royal Armouries
• The British Library
• The British Museum
• The Imperial War Museum
• The National Gallery
• The Natural History Museum
• National Museums Liverpool
• The National Maritime Museum
• The National Portrait Gallery
• The Museum of London
• Royal Botanic Gardens, Kew
• The Science Museum
• Sir John Soane’s Museum
• The Tate Gallery
• The Victoria and Albert Museum
• The Wallace Collection

Read the legal note section at the end of this guidance for the specific Regulations.

7. Recording moral payments in your charity’s accounts

7.1 Charities that prepare accrual accounts

Your charity’s accounts must give details of all moral payments made. Check the Charities’ SORP or get professional advice.

The SORP explains the accounting rules for charities that prepare accrual accounts.

7.2 Charities that prepare receipt and payments accounts

Your charity’s accounts should include details of all moral payments made. For example, why you made the payment, the amount of the payment, and the power or authority for the payment.

Check what type of accounts your charity must prepare.

8. Other types of payments

This section is about payments that are not moral payments because:

• you consider they are in your charity’s best interests, but
• you are not under any legal obligation to make them

For example, a gift to a long serving employee on retirement or an enhanced redundancy payment. The trustees of a charity may consider that these types of payments are in its best interests because they show that the charity is a good employer and will help them recruit and retain high-calibre staff.

Check your charity’s governing document. If it contains a suitable power you can use to make this type of payment, use that power. For example, trustees may be able to use a power for the trustees to do anything that is incidental to furthering the charity’s purposes.

If the governing document does not contain a suitable power, you must get authority from the Charity Commission. The Commission:

• will only authorise this type of payment where you can demonstrate that the charity will receive a benefit from making the payment
• cannot authorise anything that is prohibited by your charity’s governing document or the law

Read our separate guidance if you wish to return or refuse donations to your charity.

9. Moral payment examples

These are simple examples to help you understand moral payment situations. Read the guidance above to understand the rules on making a moral payment.

9.1 Example 1

In their will Person A leaves bequests for family members and the remainder to a named charity. Person A tells a family member that they wish to leave a gift of £2000 in their will for a neighbour because of the help and support the neighbour has given them. The family member contacts Person A’s solicitor, but Person A becomes poorly and dies before they can update the will.

The trustees of the charity consider they could reasonably be regarded as being under a moral obligation to pay £2000 from their share to Person A’s neighbour. They use the guidance to make sure they follow the rules on making a moral payment.

9.2 Example 2

Person B leaves £5000 to a named charity in their will.

Later, Person B writes a letter to their executors and to the charity named in the will asking that the £5000 is split equally between that charity and four other named charities. However, Person B’s will is not changed, and they die shortly after writing the letter. The charity named in the will receives their gift of £5000.

This charity has a team that deals with legacies, which has delegated authority to make decisions about legacies below £10,000. The team finds a copy of Person B’s letter, and taking this and other evidence into account, decides that the trustees could be reasonably regarded as being under a moral obligation to honour Person B’s wishes. They use the guidance to make sure they follow the rules on making a moral payment.

9.3 Example 3

Person C makes a will in Scotland, in which they leave a percentage of their money to a named charity.

They then move to England. There, they change their will, splitting what was left to the named charity between it and three people.

However, Person C followed Scottish rules in getting one witness to sign the changes to the will. In England, two witnesses are needed. As a result of having one witness, the change is invalid, and the charity receives what was left to it under the original will made in Scotland.

The charity receives a request for a moral payment, with a copy of the invalid will to show Person C’s intentions. The trustees consider they could reasonably be regarded as being under a moral obligation to honour Person C’s wishes. They use the guidance to make sure they follow the rules on making a moral payment.

9.4 Example 4

In their will, Person D leaves their house to their daughter, small bequests to other family members, and the remainder to a named charity.

Five years later, Person D sells their house and buys a flat in sheltered housing. They die shortly after moving into the new flat before they can update their will. Because the house has been sold this now means Person D’s daughter is not due to receive anything under the will. The charity is due to receive all of Person D’s estate apart from the small bequests made to other family members.

The charity receives a request for a moral payment from Person D’s daughter. The trustees, having considered the evidence, decide that they could reasonably be regarded as being under a moral obligation to waive their right to the proceeds of sale of the flat, so that the proceeds can pass to Person D’s daughter.

They use the guidance to make sure they follow the rules on waiving their right to the proceeds of sale.

9.5 Example 5

Person E is part way through writing his will. He inherited his wife’s estate after her death and wishes to leave his estate to relations connected to his late wife.

Person E dies before he finishes making his will and his estate passes to his brother, Person F, who is his closest living relative. This is what happens when there is no will.

When Person F dies, his estate passes to a named charity under the terms of Person F’s will. This includes what Person F inherited from Person E.

Person E’s relations, who would have benefitted from Person E’s will, ask the charity to consider a moral payment. They say Person E’s estate was never meant to go to the brother or the charity.

The trustees consider this request. They conclude there is no evidence that Person F’s will did not reflect Person F’s intentions. They do not consider they could reasonably be regarded as being under a moral obligation to make a moral payment to Person E’s relations.

9.6 Example 6

Charity G has a painting that was unlawfully removed from its owners during the Second World War. The heirs of the owner ask for the charity to return the painting.

The trustees consider it would be unjust to keep the painting having seen the evidence of its removal during the war. They decide that they could reasonably be regarded as being under a moral obligation to return the painting. They check their charity is not one of the 16 statutory charities that cannot return certain items from their collection as a moral payment. They use the guidance to make sure they follow the rules to return the painting.

9.7 Example 7

A church has an informal arrangement with its pastor to pay a monthly allowance as and when the church can afford it. Under the arrangement the pastor receives an allowance, but not every month.

When the pastor dies unexpectedly, the trustees acknowledge how hard the pastor worked for the church over the years and that the church’s inability to make the monthly payments had caused the family financial hardship.

The church is in a better financial position, and the trustees decide that they could reasonably be regarded as having a moral obligation to make a one-off payment to the pastor’s widow.

They use the guidance to make sure they follow the rules on making the moral payment.

10. Legal note

The main sections of charity law and case law relevant to this guidance are:

• statutory power enabling charities to make moral payments below a certain threshold: section 331A of the Charities Act 2011 (as amended)
• the Commission’s power to authorise moral payments: section 106 of the Charities Act 2011 (as amended)
• Charities Act 2022 (Commencement No. 4 and Saving Provision) Regulations 2025
• legal judgment Re: Snowden [1970] 1 Ch 700