How to close a charity
How to close a charity, and what to tell the Charity Commission when you have closed the charity.
Applies to England and Wales
This guidance is about charities that close voluntarily. For example, because your charity has:
- decided not to raise further funds
- merged with other charities
- changed structure, for example from a trust to a Charitable Incorporated Organisation (CIO)
Read guidance if you are closing because your charity is experiencing financial difficulties (for example, it cannot pay its debts).
You must decide that it is in your charity’s best interest to close.
Before you close your charity, there will be a number of actions you need to take or issues to think about.
From an operational perspective, these include where relevant:
- paying or settling your charity’s debts
- managing final services to your beneficiaries, and telling them about the closure
- checking if your charity may have any employee or pension issues
- checking contracts for any penalties
- considering how you will deal with your charity’s records and particularly any personal information you hold (complying with GDPR)
- understanding the costs of winding up
- communicating with other relevant groups such as volunteers or partners your charity works with
From a charity law perspective, you should consider:
- dealing appropriately with remaining funds and any assets your charity has, such as land
- dealing appropriately with any permanent endowment, designated land or special trusts
- whether you need any authority from the Charity Commission
You must tell the Commission you have closed your charity.
Guidance about these charity law areas is given in the next section. When closing because you have merged or changed structure, you will have taken these actions as part of that process. Skip to section 5 below. But if you are closing your charity for other reasons, now read section 1.
Always get relevant professional advice if you need it, for example about:
- employee or pension issues
- contracts
- dealing with permanent endowment, designated land or special trusts
1. Decide to close and wind up the affairs of your charity
Decide to close
Make the decision to close. Use our decision-making guidance to help you.
Follow the rules in your governing document. These rules may be in the dissolution clause. The rules may state you need:
- Charity Commission consent to wind up
- the consent of a third party
- to involve your members in the decision, if you have them
- to apply your charity’s remaining funds in a particular way
Particular rules on decision-making apply to CIOs that close voluntarily.
If you are a trustee of a CIO, first read section 4 about making the decision to close your charity. Then read the rest of this section about winding up the CIO’s affairs.
Pay or settle your charity’s debts
Do this first.
You should also ensure you have funds to pay for the costs of closing. For example, on any professional advice you need.
If your charity is experiencing financial difficulties and, because of this, you are thinking about closing it, read our guidance to make sure you follow the correct rules.
Spending your charity’s remaining funds
A dissolution clause sets out how a charity’s general funds and assets must be used when it is closing. General funds and assets are those that you can use in any way to further your charity’s purposes; they have no other rules on how they can be used.
Most governing documents have a dissolution clause. Follow the rules in your charity’s dissolution clause.
If your charity does not have a dissolution clause
In this circumstance, trustees of most charities can spend their charity’s general funds in ways that further the charity’s purposes. But check the governing document and if you are unsure about whether your governing document allows you to do this, get professional advice.
You can also transfer your charity’s funds and assets to another charity:
- if your governing document provides a suitable power of transfer you can use, or
- if doing so furthers your charity’s purposes
Read guidance about transferring charity assets. This explains transfer powers and transfer documentation.
Other types of funds
Your charity may only have general funds.
If your charity has other types of funds, you must follow the right process for dealing with them. For example:
- unspent grant money – check if there are any instructions in the contract about what to do with unspent funds. If there aren’t any, contact the grant-maker
- money from fundraising appeals – if you ran an appeal for specific purposes and did not reach your target amount or you raised more than you needed, read the Commission’s guidance about fundraising appeals for advice on the legal rules that apply to these types of funds
These may be types of special trusts. See the next section.
Designated land, permanent endowment and special trusts
Understand if your charity has, or is trustee of, designated land, permanent endowment or special trusts. If it has, you cannot close your charity if you do not deal with them properly.
Designated land is land that must be used for a particular purpose of your charity according to the document that explains how the land must be used. For example, property that must be used as a recreation ground.
Permanent endowment is property that your charity must keep rather than spend. Property given to your charity that must be used for a particular purpose (such as designated land) is one example of permanent endowment. Another is money or other assets given to your charity for investment where only the investment income can be spent.
A special trust is money or assets that your charity must use for specific purposes that are narrower than your charity’s purposes. Permanent endowment can be a special trust but not always.
Read our guidance transferring charity assets to understand how to deal correctly with designated land, permanent endowment or special trusts.
Check if you can use legal powers to spend from a permanent endowment fund, for example if its value is small.
Land and buildings
Dispose of any land your charity owns or terminate any lease where you rent land. You must comply with the rules on disposing of charity land.
Investments
You can sell investments, and other types of assets, or transfer them to another charity if you have the power to do this. Read guidance about transferring charity assets.
Linked charities
Check if your charity has linked charities. If it does, and you decide to close your charity, you will need to apply to the Commission to bring that linking to an end.
Tell the linked charities that the linking has been brought to an end, so they understand what this means for them.
If you want to close any of the linked charities, the trustees of each charity must do that separately.
Read guidance about linked charities.
Close your charity. You must tell the Charity Commission you have closed.
When you tell the Commission, you will need to tell us what you have done with, for example, your charity’s assets. We will not ask you to submit final accounts but do this if your governing document requires it.
You will need to follow the right closure procedure for your charity. This depends on your charity’s structure.
Read the right next section below:
2. Closing an unincorporated charity
Trusts or unincorporated associations are unincorporated charities.
This section is for unincorporated charities that have decided to close because, for example, they will no longer raise funds.
If you are closing your charity because you have merged with another charity or changed structure, skip to section 5 below.
Close the charity
First, as trustees, make your decision to close the charity and involve your members (if your charity has members) if your governing document says you must.
Read the guidance in section 1 above about making your decision and winding up the affairs of the charity.
Then, you must tell the Charity Commission you have closed.
We will remove your charity from the register of charities, and we will stop writing to you - for example to file annual returns.
You will need to tell us:
- why the charity has closed
- whether you need Charity Commission consent to wind up
- the value of your charity’s assets when you made the decision to close - and what happened to the assets when you closed the charity
- whether you transferred any of your charity’s assets to other charities before you closed, and if so their names and registration numbers
- how transferring your charity’s assets complied with rules in your governing document
- if your charity had grant-funding or donations for specific purposes and how you have dealt with them
- whether your charity had permanent endowment, designated land or special trusts. If it did, which charity or charities you transferred them to (give their names and registration numbers) and confirm that they have been transferred to the receiving charity as trustee to be held on the same trusts
- if relevant, confirm if you used legal powers to spend a permanent endowment fund
Use the online charity closure form.
If you are registered as a charity with HMRC, you will need to tell HMRC that you have closed.
3. Closing a charitable company
Company law applies to the closure of charitable companies. Understand what these rules are.
Close the charity
First, as trustees, make your decision to close the charity and involve your members if your governing document says you must.
Read the guidance in section 1 above about making your decision and winding up the affairs of the charity.
Apply for voluntary removal from the companies register
You must first apply to Companies House to remove your charitable company from the companies register.
You can only – under company law – apply to Companies House if, in the last 3 months, your charitable company has not taken any actions other than those necessary to closing it and winding up its affairs.
A company automatically ceases to exist when it is removed from the companies register.
Tell the Charity Commission
Once the charitable company is removed from the companies register, you must tell the Charity Commission.
We will remove your charity from the register of charities, and we will stop writing to you - for example to file annual returns.
You will need to provide certain information.
- Tell us why the charity closed.
- Confirm that your charity has been removed from the companies register.
- Tell us the value of your charity’s assets when you made the decision to close - and what happened to the assets when you closed the charity.
- Tell us whether you transferred any of your charity’s assets to other charities before you closed it. If you did, provide their names and registration numbers.
- Tell us how transferring your charity’s assets complied with rules in your governing document.
- Tell us if your charity was trustee of permanent endowment, designated land or special trusts.
- If it was, tell us which charity or charities you transferred them to (give their names and registration numbers) and confirm that they have been transferred to the receiving charity as trustee to be held on the same trusts.
- If relevant, tell us if you used legal powers to spend any permanent endowment fund.
- Tell us if your charity had grant-funding or donations for specific purposes and how you have dealt with them.
Use the online charity closure form.
If you are registered as a charity with HMRC, you will need to tell HMRC that you have closed.
4. Closing a Charitable Incorporated Organisation (CIO)
This section is for CIOs that have closed voluntarily. For example, because the trustees have decided not to raise further funds.
This guidance does not apply if your CIO has merged with another CIO using the legal steps set out in our guidance about CIOs merging.
Decision-making
First, as trustees, make the decision to close.
Then, members must pass a resolution. This can either be:
- by a 75% majority of those voting at a general meeting
- without a vote if there are no objections to the question put to the meeting
- by unanimous agreement of the members (if no meeting is held)
If the decision is made at a general meeting, you must give notice of no less than 14 clear days to all those entitled to vote, unless voting members agree that notice is not needed.
If you give notice, it must include the wording of the proposed resolution.
If your CIO is a foundation CIO, your trustees are the only members of the charity. You must still pass the separate members’ resolution.
Now, understand what actions you need to take to wind up the affairs of the CIO. For example, about paying or settling its debts and dealing with any assets it has. Read the guidance in section 1 above.
Trustee declaration
After making the decision to close and passing the members’ resolution, the trustees must make a declaration that:
- any debts and other liabilities of the CIO have been settled or otherwise provided for in full
- says how any assets (including land or property) have been or are to be applied before closing
Apply to the Commission
Send to the Commission:
- your members’ resolution
- your trustee declaration
You will also need to confirm to us that:
- no liquidator is acting for the CIO
- you are acting on behalf of the trustees or the majority of them
- you have followed the exact procedure as set out in your charity’s constitution
Use the online charity closure form.
Once you have made your application, the trustees must not:
- take any actions except those that are essential to closing the charity and permitted by the CIO (Insolvency and Dissolution) Regulations 2012
- incur any debts or liabilities
You must tell the Commission if, after making the application, the CIO’s circumstances change. For example:
- you want to withdraw the application
- the CIO has received any property, for example donations
You must withdraw your application during this time if, for example:
- an administrator is appointed for the CIO
- a petition is presented at court for the winding up of the CIO
Give notice
Within 7 days of sending your application to the Commission, the trustees must give notice of it. The notice must include:
- the date you applied to the Commission
- the names of the trustees who made the application
The notice must be provided to all of the CIO’s:
- members
- employees
- trustees (unless they were involved in making the application)
You can hand deliver the notice or send it in the post; you cannot email it.
The Commission will publish a notice on your register entry stating that it has received your application.
Subject to any views or representations we receive, we will remove the CIO from the register after 3 months.
The Commission must then publish a notice stating the date of removal.
A CIO automatically ceases to exist when it’s removed from the register.
After closure
If you are registered as a charity with HMRC, you will need to tell HMRC that you have closed.
5. Closing as a result of merging or changing structure
This section is for charities that are closing because they have merged with other charities, or they have changed structure.
If your CIO has merged with another CIO using the legal steps set out in our guidance, you do not need to separately tell us that your charity has closed. This guidance does not apply to you.
As part of the merger or change structure process, you will have transferred your charity’s assets and liabilities to:
- the charity you are merging with, or
- the charity you have set up in the new structure
In this guidance, this charity is called the ‘receiving charity’.
If you are unsure about this, read our guidance about merging or changing structure.
Once you have:
- transferred all your assets and liabilities to the receiving charity
- dealt appropriately with any permanent endowment, designated land or special trusts
- dealt appropriately with your charity’s records, for example by passing relevant records to the receiving charity
you can close your charity.
As trustees, make the decision to close:
- comply with the rules in your governing document
- involve your members if your charity has members and your governing document says you must
- if your charity is a charitable company, you must comply with Companies House requirements. Read section 3 above
- if your charity is a CIO and, for example, you have merged with an unincorporated charity or with a charitable company, you must comply with the requirements set out in section 4 above
Then, you must tell the Charity Commission you have closed.
We will remove your charity from the register of charities, and we will stop writing to you - for example to file annual returns.
You will need to tell us:
- if your charity is closing as a result of merging or changing structure
- the name and registration number of the receiving charity
- the value of your charity’s assets when you made the decision to close
- if your charity had grant-funding or donations for specific purposes and how you have dealt with them
- where you changed structure, that the receiving charity’s purposes are the same as your charity’s purposes
- where you have merged, which power you used, or confirm that the transfer of your charity’s assets to the receiving charity furthered your charity’s purposes
- where you have merged and where the receiving charity’s purposes are wider than your charity’s purposes, that the receiving charity will hold and apply your charity’s funds in line with your charity’s purposes, not the wider purposes of the receiving charity - unless the power you used permits this
- if your charity had, or was trustee of, permanent endowment, designated land or special trusts
- if it did, confirm if these have been transferred to the receiving charity and that it will hold them on their existing trusts
- if you have received all Charity Commission authority that you needed as part of transferring your charity’s assets
- if you used a pre-merger vesting declaration to transfer your charity’s assets
- if the receiving charity will or has registered the merger on the register of merged charities. This is also relevant if you have changed structure. Read guidance about the register of merged charities
Where your charity is a charitable company, you will need to:
- confirm your charity has been removed from the companies register
Use the online charity closure form.
If you are registered as a charity with HMRC, you need to tell HMRC that you have closed.
6. Your responsibilities after your charity has closed
You must keep the charity’s accounts, and books and records. This includes cash books, invoices, receipts and bank statements. They must be retained for at least 6 years from the end of the financial year in which they were made. If you have merged or changed structure, you can ask the receiving charity to keep these records for you.
You and the other trustees remain responsible for the decisions you made while you were in office.
Updates to this page
Last updated 7 March 2024 + show all updates
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Guidance updated to reflect changes introduced by the Charities Act 2022.
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First published.