Transactions at an undervalue meaning

Checklist and timeline This concise checklist and timeline is prepared on the footing that proceedings are brought under sections 238 and/or 239 of the Insolvency Act 1986 (IA 1986) by an administrator or liquidator, and not by any assignee of the claim. Step/action: Review the events leading to the company’s insolvency and the factors underpinning the claim(s) against the respondent(s) (typically the recipients of the relevant payments/transactions). This involves securing the company’s books and records, accounting data/statements and bank statements, and interviewing directors, former directors, and any person with knowledge of the promotion, formation, business dealings, affairs or property of the company. Note that if the office-holder signals a claim against the respondent(s), they risk losing investigative powers under IA 1986, ss 235–236 in relation to that claim. Time (days): No limit (subject to limitation). Section/rule: IA 1986, ss 234–236, 238, 239; Cloverbay Ltd (joint administrators) v Bank of Credit and Commerce International SA [1991] Ch 90, [1991] 1 All ER 894. ...

Checklist and timeline This concise checklist and timetable is prepared from the viewpoint of a claim started under sections 339 and/or 340 of the Insolvency Act 1986 (IA 1986) by a trustee in bankruptcy (trustee). Step/action Time (days) Section/rule Examine the background and circumstances culminating in the debtor’s bankruptcy and the issues underpinning the claim(s) against the respondent(s) (usually those who received the payments/transactions). This encompasses securing the books, papers or records concerning the bankrupt’s estate or affairs that must be handed to the trustee, and conducting interviews with, among others, the bankrupt, the bankrupt’s spouse, former spouse, civil partner or former civil partner, and any person who appears able to provide information about the bankrupt or their dealings, affairs or property, as relevant to the matters in issue. No limit (subject to limitation) IA 1986, ss 365–366 Prepare and issue the application containing the particulars required by Insolvency (England and Wales) Rules 2016 (IR...

VBER 2022 flowchart This flowchart provides an at‑a‑glance pathway to assess whether the VBER 2022 safe harbour applies to an agreement. For the purposes of the flowchart, it is taken that the agreement is a vertical arrangement and that it complies with Article 2(3), VBER 2022 (concerning IP provisions) and, where relevant, Articles 2(4)–(6), VBER 2022 (relating to dual distribution). Throughout the flowchart, the VBER 2022 is referred to as the EU VBER...

Businesses involved in cartel conduct may come forward as whistleblowers to secure reduced penalties. This means co-operating with the Competition and Markets Authority (CMA), supplying information on the cartel and those taking part, and setting out full details of the business’s own role in the arrangement...

Purkiss (as liquidator of Ethos Solutions Ltd) v Kennedy and others [2024] EWHC 1081 (Ch) What are the practical implications of this case? This judgment clarifies the scope of IA 1986, s 423 and confirms that tax avoidance, standing alone, is not an unlawful purpose. The respondents received monies they should not have obtained by joining a failed tax avoidance arrangement; yet, without additional evidence, IA 1986, s 423 was not the appropriate avenue to recover those sums What was the background? The Company was an umbrella enterprise established in 2008 that promoted and operated a tax avoidance scheme (the Scheme) intended to enable self‑employed participants to avoid paying income tax and national insurance contributions (NICs) on their earnings. Under the Scheme, individuals who had supplied services to an end user as consultants or independent contractors became employees of the Company and then delivered their services to the end user through the Company. Most of their remuneration was routed by the Company to an offshore employee...

In this issue Probate Trusts Court of Protection UK taxes for Private Client HMRC Manuals tracker Insolvency—private client Digital assets and cryptoassets International Question of the week Additional Private Client updates this week Daily and weekly news alerts LexTalk®Private Client: a Lexis+® community New and updated content Dates for your diary Trackers Latest Q&A Useful information Probate IHT400 revised and new IHT401a schedule to note non long-term residence of the deceased With the residence-based IHT regime commencing on 6 April 2025, and as highlighted in HMRC’s Trusts and Estates newsletter, HMRC has refreshed Form IHT400 and introduced schedule IHT401a to address cases where the deceased was not a long-term UK resident at the date of death. Sources: Inheritance Tax: long-term United Kingdom (UK) residence (IHT401a) and HMRC Trusts and Estates Newsletter: April 2025. Trusts Trust Registration Service (TRS) update: trustees must close and re-register...

See Checklist: Overview checklist and timeline for transfer at below value and...

This Practice Note provides a concise overview of bankruptcy and its effect on legal proceedings from a dispute resolution standpoint, summarising key points in practice... What is bankruptcy? Bankruptcy is an insolvency route for individuals. It applies to individuals only. Prior to 6 April 2016—and in contrast to corporate liquidation—only the court had power to make an individual bankrupt. From 6 April 2016, a new bankruptcy applications regime took effect, replacing debtors' bankruptcy petitions, though creditors' petitions remained unaffected. Petitions lodged by debtors before that date were unaffected; now, anyone seeking their own bankruptcy must file an online application decided by an adjudicator—an official of the Insolvency Service—rather than the court. For more detail and background, see News Analysis: New bankruptcy applications regime to come into force. Once a bankruptcy order is made—by the court or by the adjudicator—it releases the debtor from liabilities owed to creditors (subject to certain statutory exceptions) and bars unsecured creditors from starting—or continuing with—any legal process against the bankrupt or their property...

The Land Charges Act 1972 (LCA 1972) requires HM Land Registry to keep distinct public records, namely: a register of land charges a register of pending land actions and pending bankruptcy actions a register of writs and orders affecting land, and of writs and orders in bankruptcy These sit entirely apart from the substantive title register and are administered by the Land Charges Department of HM Land Registry at its Plymouth office. This Practice Note explains when to carry out a bankruptcy search in those registers in relation to an individual or individuals. It does not cover enquiries aimed at assessing a company’s solvency; see the separate Practice Notes: Pre-contract searches, Pre-completion searches, and Quick guide to property insolvency. For guidance on land charges and the land charges register, refer to Practice Note: Land charges under the Land Charges Act 1972—registration and purpose. The LCA 1972 also established registers of deeds of arrangement and of annuities, which are now closed;...

In both corporate and personal insolvency, office-holders chiefly gather the company’s or individual’s assets, realise them and distribute the proceeds to creditors in accordance with the statutory waterfall. For more detail, consult the following Practice Notes: Waterfall of payments—a comparative guide Waterfall of payments in administration Waterfall of payments in liquidation Waterfall of payments in bankruptcy Waterfall of payments in administrative receivership Pari passu distribution Pari passu, a Latin term, translates as ‘with an equal step’ or ‘on equal footing’. In insolvency, it captures the principle of proportionality and is used to describe how creditors are treated relative to one another. Where claims rank ‘pari passu’, all creditors within the same class are paid alike, with no one preferred. If funds are insufficient to satisfy debts in full, distributions are made pro rata on a pari passu basis, so each receives a proportionate return. For instance, unsecured creditors (ie creditors in the same category) might receive 10p...

Applicant and Statement Details Applicant(s): [ insert initials and surname ] Statement number: [ insert number of witness statement eg 1st ] Exhibit: [ insert exhibit description ] Date: [ insert date of witness statement ] Case No: [ insert case number ] [ IN THE HIGH COURT OF JUSTICE BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES INSOLVENCY AND COMPANIES LIST (ChD) OR IN THE HIGH COURT OF JUSTICE BUSINESS AND PROPERTY COURTS IN [ insert location ] INSOLVENCY AND COMPANIES LIST (ChD) OR IN THE COUNTY COURT AT [ insert location ] BUSINESS AND PROPERTY WORK ] [ IN THE MATTER OF [ insert company’s name ] OR IN THE MATTER OF [ insert bankrupt’s name ] IN BANKRUPTCY ] AND IN THE MATTER OF THE INSOLVENCY ACT 1986 BETWEEN [ Insert name(s) of the Applicant(s) ] Applicant(s) AND [ Insert name(s) of the Respondent(s) ] Respondent(s) Witness statement number [ INSERT NUMBER ]...

CASE NO: [ insert case number ] [ In the High Court of Justice, Business and Property Courts of England and Wales, Insolvency and Companies List (ChD) OR In the High Court of Justice, Business and Property Courts in [ insert location ], Insolvency and Companies List (ChD) OR In the County Court at [ insert location ], Business and Property work ] Before: [ [Deputy] Insolvency and Companies Court Judge ............................. / The Honourable [Mr/Mrs] Justice .......................... / [Deputy] District Judge ............................. / [His/Her] Honour Judge .......................... ] Dated [ insert date ] [ In the matter of [ insert company’s name ] OR...

INSOLVENCY ACT APPLICATION NOTICE Use this Precedent alongside an application notice template that accords with the Insolvency (England and Wales) Rules 2016, SI 2016/1024, including Form IAA under IR 2016, r 1.35. Complete the following: case number; court heading (High Court—Business and Property Courts, Insolvency and Companies List (ChD), specifying location where appropriate, or County Court—Business and Property Work); and the matter (company or bankrupt) in bankruptcy and under the Insolvency Act 1986. Identify the Applicant(s) and Respondent(s) with full names and addresses, the company/bankrupt concerned, and the judicial level and court or hearing centre. Confirm whether the application sits within existing insolvency proceedings (YES/NO) and provide the related court reference. Statutory basis: section(s) 238, 239, 339 and/or 340. Relief sought: declaration of preference/transaction at an undervalue; repayment to restore the position; interest under the Court’s equitable jurisdiction or section 35A Senior Courts Act 1981; costs; any further order. Grounds: set out in the numbered witness statement with author and date. Service: list...

If a lease was granted at undervalue, you are the 3rd owner, and you knew it was at undervalue, if creditors ask for an order returning the property to the original owner you cannot claim relief? Transactions at an undervalue (TUVs) are regulated by the Insolvency Act 1986 (IA 1986). The relevant provisions are: sections 238, 240 and 241 of the IA 1986 for companies sections 339 to 342 of the IA 1986 for individuals These powers are available to trustees in bankruptcy, liquidators (in both compulsory and voluntary liquidations), and administrators. They permit the office-holder to review dealings made by the insolvent person or company in the lead-up to insolvency and to assess whether assets should be recovered for the insolvent estate. In particular, an order under: section 241 of the IA 1986 (for companies), or section 342 of the IA 1986 (for individuals) cannot be made against the other party to a...