Model CIOs

In the past many assemblies and independent churches did not think they had to register as a charity. Some thought they operated under their property Trust or did not need to register because they occupied a Registered Place of Worship. Most traditional Open Brethren assemblies and other independent churches are charities, despite not having any governing document, such as a Trust Deed. If your annual income is over £5,000 and you wish to take advantage of Gift Aid and other charitable tax concessions, you will need to register with the Charity Commission. To do so, you will need a governing document, which will vary with the type of charity.

There are three main forms of charities that are suitable for a church. The traditional and simple form of charity is a charitable Trust; standard forms for such are available on the Charity Commission website. The Trust can be set up and will only be registerable with the Charity Commission once the annual income is over £5,000. The downside of a charitable Trust is that the individual trustees are liable for contracts and debts of the Trust and if the charity owns a property or holds a long lease, every time a new trustee is appointed there will be a requirement to re-register the title with the Land Registry.

Historically the other common form of charity has been a charitable company. In this case the company is formed with Companies House and, if the annual income exceeds £5,000, the company can be registered with the Charity Commission. There is a requirement to produce annual returns both to Companies House and the Charity Commission, which can be a lot of effort, unless your annual income is over £25,000 (where your accounts would need to be independently examined and would therefore be easy to put in the correct form). The advantage here is that trustees have limited liability and the company holds the title to any property, which negates the requirement to register the title to the property every time a new trustee is appointed.

There is now a new form of charity called a charitable incorporated organisation (CIO). This has the simplicity of a Trust, but the limited liability of a company. The CIO was agreed in the Charities Act 2006 and is specifically designed for charities. The formation of the charity and registration with the Charity Commission take place at the same time and there is no requirement for the annual income to be over £5,000 before doing so. Church Growth Trust (CGT) is generally recommending that new church charities are CIOs and has produced a briefing paper on CIOs. Again, there are a number of Charity Commission models that can be used.

CGT, in co-operation with Partnership and the Western Counties and South Wales Evangelization Trust, has produced a model CIO, designed for elder-led independent churches. Although the Charity Commission have declined to accept this as one of their models, it is based on one of their standard constitutions and has been used successfully by a number of assemblies. Charity registration takes place online and you need to have a number of documents in place before you register. It is possible to do this yourself, but may be better to use solicitors who have expertise in this area.

If you would like CGT’s free Model CIO Pack, which contains the model documents and guidance on how to use them, please contact the office on 01536 201339 or email