Jurisdiction(s):
United Kingdom

Related legal acts

Key definition

Floating charge definition

What does Floating charge mean? A floating charge is a security interest over a changing pool of assets (present and future) that the chargor may deal with in the ordinary course of business until the charge fixes to those assets. It is typically granted by companies or LLPs under an all‑assets debenture. In England & Wales and Northern Ireland its key features are developed by case law and statute: the charge “crystallises” on agreed or insolvency events and then operates like a fixed charge over the assets then subject to it. In Scotland, floating charges exist only by statute and “attach” on specified...

Fixed versus Floating Charges under English Law: Characterisation, Control, Asset Classes, Perfection, Priority, Crystallisation and Release

Published by a LexisNexis Banking & Finance expert

Practice notes

Types of security

Under English law, four principal forms of security exist:

mortgage
Charge
pledge
Lien

This Practice Note sets out:

the nature of a charge (as contrasted with other security interests)
the distinction between a fixed charge and a floating charge
the asset classes commonly subjected to fixed charges
perfection of fixed charges
priority issues when taking a fixed charge

The Note mainly centres on fixed charges. Practice Note: Floating charges offers fuller detail on floating charges, including factors to weigh when taking a floating charge, and matters of crystallisation and re-characterisation. Special rules govern agricultural charges; for details, see Practice Note: Agricultural charges under the Agricultural Credits Act 1928.

Key takeaways

Nature of a charge – it grants the secured creditor an equitable proprietary interest without passing title or possession, setting it apart from mortgages, pledges and liens.
Fixed vs floating – a fixed charge curtails the chargor’s freedom to handle the asset, whereas a floating charge permits dealings in the ordinary course of business until crystallisation...

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Web page updated on 21/05/2026

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