Closing a charity properly

Closing a charity is a legal process with a fixed order, and most problems come from doing the steps out of sequence: spending or moving assets before the decision is valid, applying to Companies House before a Scottish charity has OSCR consent, or forgetting the final accounts.

This guide is for trustees and secretaries of small charities in England and Wales, Scotland and Northern Ireland who have decided, or are close to deciding, to wind up. It also covers the closing half of a merger, because a charity that transfers everything to another charity and then dissolves goes through the same steps.

The short version is that you should decide properly, get any consent you need, settle what you owe, pass what is left to the right home, file the last accounts and only then ask to be removed from the register.

Before you decide

The trustees must be satisfied that closing is in the charity's best interests, and the minutes should show why. The Charity Commission says this plainly in its closure guidance, and OSCR and CCNI expect the same.

It is worth recording that you looked at the alternatives first. These usually include recruiting new trustees, sharing back-office costs with a similar charity, handing a project to another organisation, or merging. A board that has tried and failed to fill vacancies is in a stronger position than one that simply ran out of energy.

Then read the governing document. Look for three things:

1. The dissolution clause, which says how the charity can be wound up and where any remaining assets must go.
2. Who has to agree. Many constitutions require a members' vote at a general meeting, often with a special majority and a set notice period, as well as a trustee decision.
3. Any third party whose consent is needed, such as a founding body, a funder or a landlord.

Hold the decision at a properly called, quorate meeting and minute it in full, including the wording of any resolution. The regulators ask for the reason for closure and, in some cases, the exact resolution, so a vague minute causes delay later.

Which route applies to you

The steps depend on two things: your legal form and which regulator you are registered with. A Scottish charity needs OSCR's consent before it acts, while charities in England and Wales and Northern Ireland usually close first and tell the regulator afterwards.

If you are registered with more than one regulator, for example a charity based in England that also operates in Scotland, you must follow each regulator's process.

Scotland: OSCR consent comes first

Under section 16 of the Charities and Trustee Investment (Scotland) Act 2005, a charity may wind itself up or dissolve only with OSCR's consent. The old requirement to give OSCR 42 days' notice was removed in April 2024, but you must still apply and wait for OSCR's decision before acting. This is the step most often missed, particularly by charitable companies that go straight to Companies House.

OSCR's guidance sets out the order:

1. List the charity's assets and liabilities at the date of the application. OSCR publishes a table of what it needs for each type, from cash and buildings to pension liabilities and tax owed.
2. Check that the governing document, and the law for your legal form, give you the power to wind up.
3. Decide where the remaining assets will go, in line with the dissolution clause.
4. Apply for consent before you distribute any assets or take any step to wind up.

OSCR must reach a decision within 28 days of having all the information it needs. It can consent (often with conditions), refuse, or direct you to wait while it looks further. Once you have consent, wind up in line with your governing document and any conditions, then send OSCR the information it asked for within 3 months. OSCR removes the charity from the Scottish Charity Register only when it has that information.

Two points catch people out. First, consent does not itself dissolve the charity: an unincorporated association ends when the trustees formally agree to dissolve, a company when Companies House dissolves it, and a trust when its capital is spent. Second, governing documents written before 2005 may use a wider meaning of "charity", so a dissolution clause pointing to "a charity" may need checking against the 2005 Act definition.

SCIOs use a separate application, either for a solvent or an insolvent dissolution. A SCIO ceases to exist on the date OSCR removes it from the register.

England and Wales: close, then tell the Commission

Most charities in England and Wales do not need the Charity Commission's permission to close, unless the governing document says so or the charity holds permanent endowment, designated land or special trusts it cannot otherwise deal with. The Commission says to pay or settle debts first and to keep enough back for the costs of closing.

Unincorporated charities

Make the decision, involve members if the constitution requires it, wind up the charity's affairs, and then report the closure through the Commission's online closure form. The Commission asks why the charity closed, the value of its assets when the decision was made, where they went, and how any restricted grants or appeal money were handled. It will not ask for final accounts unless your governing document requires them.

Charitable companies

These must be struck off the companies register first (see the Companies House section below), and only then tell the Commission.

CIOs

CIOs follow a stricter process set by the CIO (Insolvency and Dissolution) Regulations 2012:

1. The trustees decide to close.
2. The members pass a resolution, by 75% of those voting at a general meeting, or unanimously if there is no meeting. At least 14 clear days' notice is needed for a meeting, including the wording of the resolution. A foundation CIO, where the trustees are the only members, still has to pass the members' resolution.
3. The trustees declare that all debts and liabilities have been settled or provided for, and say how the assets have been or will be applied.
4. The trustees apply to the Commission with the resolution and declaration.
5. Within 7 days, they give notice of the application to all members, employees and any trustees not involved, by hand or by post, not email.
6. The Commission publishes a notice and, if nobody objects, removes the CIO from the register after 3 months. The CIO ceases to exist on removal.

After applying, a CIO must not take on debts or do anything beyond what is needed to close, and must tell the Commission if it receives any property, including donations.

Mergers

If your charity is closing because it has transferred everything to another charity, the receiving charity can enter the merger on the register of merged charities. Registration means that most legacies left to the closed charity pass to the receiving charity instead of failing.

Northern Ireland: notify CCNI and file the last return

Registered charities in Northern Ireland must tell the Charity Commission for Northern Ireland that they have closed, under section 17(3) of the Charities Act (Northern Ireland) 2008. CCNI's mergers and closures guidance sets out the process.

1. Clear all debts and liabilities, including any redundancy pay, before transferring or spending what is left.
2. Deal with property under the dissolution clause. If there is no clause or power to transfer, apply to CCNI for an order or scheme, and for land you may also need authorisation from the Department for Communities.
3. Notify CCNI on the closures form, giving the closure date, the reason, and the assets transferred or still to be transferred.
4. Change the financial year end in CCNI's online services to the date the charity stopped operating.
5. Submit the final annual monitoring return, accounts and reports within 10 months of closure.

CCNI marks the charity as not operating once notified, and as ceased to exist once the final return and accounts have been reviewed. Grants or donations given for a specific purpose must be used for that purpose, used differently with the donor's consent, or returned.

Charitable companies: Companies House strike-off

A solvent charitable company usually closes by voluntary strike-off on form DS01. A Scottish charitable company needs OSCR's consent before it files. In England and Wales and Northern Ireland, strike-off comes before telling the charity regulator.

The three-month rule shapes the timetable. Settle debts, transfer the remaining assets and close the bank account first, then wait before filing. Once Companies House dissolves the company, tell the Charity Commission or CCNI, or send OSCR the information it asked for.

Transferring what is left

Assets can only go where the dissolution clause allows, which is usually another charity with the same or similar purposes. They cannot be shared out among members or trustees.

Sort the funds into types before deciding anything, because each is treated differently.

When choosing a recipient, confirm that its purposes match yours and that it is willing to accept. A short transfer agreement is good practice, recording what is transferred, on what terms, and that any restricted money will stay restricted. If the recipient's purposes are wider than yours, it should hold your funds for your purposes. In Scotland, OSCR may ask for written confirmation that a non-charity recipient will use the assets only for charitable purposes.

Keep the evidence: a closing bank statement showing a nil balance and the recipient's receipt. OSCR in particular often asks for this.

Final accounts and loose ends

The rules on final accounts differ by regulator. In Northern Ireland the final accounts and annual monitoring return are a legal requirement within 10 months of closure. OSCR usually asks for evidence such as final accounts or closing bank statements as a condition of consent. The Charity Commission does not ask for final accounts, but any annual returns already due must still be filed. Whatever the rules, a short final set of accounts showing where every pound went is the cleanest record for the trustees.

Work through the practical side alongside the legal steps:

• HMRC: tell HMRC the charity has closed using form ChV1, and make any last Gift Aid claim before you do. Close PAYE and VAT registrations if you have them.
• Staff and volunteers: follow employment law on consultation and redundancy, and check pension scheme obligations early, because a pension debt can change whether the charity is solvent at all.
• Contracts and premises: check leases, service agreements and equipment hire for notice periods and exit penalties.
• Beneficiaries and partners: tell them in good time and, where possible, point them to another service.
• Data: decide what personal information is kept, passed on or destroyed, in line with data protection law.
• Digital accounts: close or transfer the website, domain, email and social media, and keep access long enough to deal with late post or queries.
• Bank account: close it once the last payment has cleared, and keep the final statement.

After closure, keep the accounting records. The Charity Commission and CCNI both say at least 6 years from the end of the financial year concerned; charitable companies must also meet company law requirements. If you merged, the receiving charity can keep them. Trustees remain responsible for decisions made while they were in office.

Checklist in order

The mistakes that cause most trouble:

• transferring assets in Scotland before OSCR has consented;
• filing a DS01 while the company is still trading or paying out, which breaks the three-month rule;
• treating restricted grants as general funds, or passing them on without the funder's agreement;
• missing the 7-day notices for a DS01 or a CIO application;
• a minute that records the decision but not the reason, or a resolution passed on short notice;
• leaving the merger unregistered, so later legacies to the old charity fail.

Sources: Charity Commission, How to close a charity; GOV.UK, Remove a charity from the charities register; CIO (Insolvency and Dissolution) Regulations 2012; Charities and Trustee Investment (Scotland) Act 2005, s16; OSCR, Wind up or dissolve the charity; CCNI, Mergers and closures guidance (EG035); Companies House, form DS01; Inform Direct, Companies House fees from 1 February 2026; HMRC, form ChV1.

This guide is general information for trustees and committee members, not legal advice, and every charity is different. Your governing document may set rules of its own, so check it, and take professional advice if the charity owns land, holds permanent endowment, employs staff, has a pension scheme, or may not be able to pay its debts. Last reviewed October 2026.