Ex gratia – a guide for charity legacy professionals

In November 2025, the long-awaited changes to the ex gratia regime came into force. Bates Wells and the Institute of Legacy Management have collaborated to produce a guide to explain what charities should bear in mind when making ex gratia payments, including navigating decision-making and delegation within a charity’s legacy team.

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Quick reminder – what is an ex gratia payment?

What’s changed and what benefits have the changes brought?

Decision-making roadmap if you receive an ex gratia request

To what extent (if any) should charities let reputational issues impact questions of morality?

Delegation

Communication

Quick reminder – what is an ex gratia payment?

An ex gratia payment is a payment (or giving up of an interest) which the charity doesn’t have a legal obligation to make and which can’t be justified as being in the interests of the charity, but which – in all the circumstances – the charity trustees could reasonably be regarded as being under a moral obligation to make. It’s a scenario that crops up most often for charities dealing with legacies – for example, where a potential beneficiary under a Will feels that the Will does not reflect the testator’s intentions, but they don’t have legal grounds to challenge the Will.

What’s changed and what benefits have the changes brought?

On the surface, the recent changes seem to be good news all around. They make it easier and quicker for charities to make ex gratia payments, removing the need to involve the Charity Commission where the value of an ex gratia payment is within the relevant threshold. Whereas previously the Charity Commission had to approve all payments (although in practice it said that it was unlikely to challenge payments of under £1,000), charities can now make payments up to a certain level without Charity Commission consent. The threshold for payments varies according to the size of the charity, as set out below:

There’s no limit on the number of ex gratia payments a charity can make, meaning there’s no overall monetary limit placed on charities (provided each individual payment does not exceed the stated threshold without first obtaining Charity Commission consent).

Moreover, the amended rules usefully allow trustees to delegate the decision-making on ex gratia payments. Previously, the obligation attached to the trustees personally – the trustees had to be satisfied that they had a moral obligation. The test is now an objective one, namely that ‘in all the circumstances the charity trustees could reasonably be regarded as being under a moral obligation’. This means it’s now possible for trustees to delegate decision-making to others within the charity, such as those working within the charity’s legacy team.

The changes will therefore reduce the administrative burden on charities and, in relation to smaller ex gratia payments, reduce the internal (and sometimes external) costs and delays of dealing with the Charity Commission in situations where charities feel that there is a clear ex gratia scenario. These are certainly welcome benefits for charities.

However, it’s important to remember that otherwise, the test has not changed, and ex gratia payments should only be made where in all the circumstances the charity’s trustees could reasonably be regarded as being under a moral obligation. Charities must still consider the evidence available and make robust, defensible decisions in proper discharge of their decision-making powers.

Charities should also bear in mind what ex gratia is not. It is not:

• an alternative to applying for rectification of the will when the professional will writer has been negligent (in this situation, the executor should apply for rectification with the costs met by the negligent will writer’s PI insurers);
• a way to settle a claim “via the back door”, when the potential claimant has not properly set out and evidenced their claim.

If it’s not truly an ex gratia situation, charities should reject the request and not allow the regime to be abused.  

Decision-making roadmap if you receive an ex gratia request

When a charity receives an ex gratia request, you should first consider what is a “moral obligation?”

The Charity Commission says that the basis for making an ex gratia 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 another way, would it be unconscionable not to make the payment in all the circumstances of the case?

Although the test is now an objective one, it will be very difficult – if not impossible – for all charities to adopt a uniform approach as to what is “moral”. In practice, different charities are likely going to be influenced by issues relevant to their particular charity e.g. a children’s charity being more alive to issues relating to child welfare.

Different charities will have different views. Each charity will need to make the decision for itself even if the request relates to a shared residuary estate. Charities should respect each other’s views and not seek to pressure others.

However, there are advantages to charities working together: it can make collecting evidence easier, and there can be strength in numbers when the answer is “no”. Best practice would be to discuss matters, share information and give each other time to make a decision, so that the matter can be dealt with in an organised and professional way, even if different charities ultimately make different decisions.

Conscious that some applicants might seek to exploit the regime for “try ons”, charities should always consider taking legal advice if they’re unsure in any particular case. This can help charities make decisions with confidence.

To what extent (if any) should charities let reputational issues impact questions of morality?

This doesn’t mean having a blanket “yes” or “no” policy for fear of reputational repercussions, rather that charities should consider how to communicate decisions with reputation in mind.

Individual charities will also want to avoid garnering a reputation as a “soft touch”: not only might this deter support for the charity, it might also invite more requests in the future.

All decisions should be fully documented, including with reasons and supported by as much evidence as possible. Charities should feel confident to ask for further evidence if they consider they need it to make an informed, defensible decision. The Charity Commission’s guidance (CC7: “How charities can make a moral, or ‘ex gratia’, payment”; updated 27 November 2025) is very clear about the robust evidence it would expect to see when it’s asked to consent to an ex gratia payment. In relation to legacy cases, the Commission’s guidance notes that:

“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.”

It’s important to note that the same principles should apply even where the payment falls below the consent threshold.

The focus should remain on respecting the donor’s wishes. Charities can honour requests when the situation is clearly ex gratia, but when it’s not, charities risk giving away money that donors wanted your charity to receive.  

Delegation

Charities need to be clear about how decisions on ex gratia payments will be delegated. A decision to make a payment is still a board decision, subject to a properly constituted delegation framework. How will delegation best work within your charity? What threshold(s) will your charity have under your scheme of delegation for sending decisions back to the trustees? Will your scheme of delegation include some examples of situations where the trustees do consider that there would be a moral obligation?

Remember, the thresholds within your scheme of delegation don’t have to match the Charity Commission’s thresholds for ex gratia requests: your board can delegate authority to make ex gratia payments greater than £20,000: for larger charities, £20,000 is simply the level at which the Charity Commission needs to give consent. 

All delegation frameworks need to be kept under review and updated from time to time. Regular reports to the board on decisions made and why, with authority levels also kept under regular review (e.g. annual), should give your board confidence to delegate authority for higher amounts.

Schemes of delegation are about streamlining trustee decision-making whilst managing risk. Authority levels for claim settlements are often not aligned with ex gratia payments, which seems odd. Some senior legacy managers have high authority levels to settle claims but very low ex gratia authority levels. It might be more efficient for your charity if these were aligned.  

Communication

For ex gratia payments under the threshold relevant to your charity, although charities can still seek consent of the Charity Commission, in practice it’s unlikely that the Charity Commission will agree to become involved meaning charities will need to make and own the decisions themselves. This will make communication with those making the requests even more important.

Different charities will have different communication styles. Your charity may wish to focus on the good work your charity will be able to do with the money it has decided to keep; other charities may prefer to reference your charity’s legal obligations. Either way, best practice is to be clear in your decision-making and to present your decision in a positive, non-defensive way. Charities can still be polite and sympathetic whilst saying “no”.

It might help to include in the communication a link to the Charity Commission’s guidance on ex gratia payments, so that there’s full transparency as to what is required and why a particular request has not met the test.

If different charities make different decisions, individual responses will need to be sent, either from the charities direct or via the executors. You should also consider how best to communicate a decision if the legacy is shared and all charities have decided not to grant the request. In those circumstances, it might be better for there to be one communication on behalf of all charities, to avoid the person making the request receiving multiple rejections. This single communication could be sent by a solicitor jointly instructed, to avoid any one charity being seen as responsible for the rejection.

It is useful for charities to remember that there is no right of appeal. The disappointed person who made the request might seek to complain to the Charity Commission, but it is a decision your charity is entitled to make and we very much doubt the Commission would wish to get involved. It will however be important for you to maintain good records of all decisions made and why.

Please get in touch with our charity legacies team if you have any questions.

The material in this article is provided for guidance and general information only and is not intended to constitute legal or other professional advice upon which you should rely. In particular, the information should not be used as a substitute for a full and proper consultation with a suitably qualified professional. Please do contact the Bates Wells team if you require further advice.