Jurisdiction(s):
United Kingdom

Related legal acts

Key definition

Transaction definition

What does Transaction mean? A transaction describes a legally binding dealing or arrangement by which assets, securities, services or obligations are created, transferred, varied or extinguished, whether as a single step or a series of steps. In practice this includes corporate acquisitions and disposals, real estate conveyancing, lending and taking security, restructurings, derivatives and other commercial dealings. In capital markets, a transaction commonly means the purchase, sale, subscription or underwriting of a particular investment. The term is a descriptive umbrella used across multiple legal contexts rather than a term with a single statutory meaning. Specific legislation, regulatory rules and contracts may define “transaction”...

Section 423 Insolvency Act 1986: Transactions Defrauding Creditors—Undervalue, Purpose, Procedure, Standing, Remedies, Defences, Limitation and Key Case Law

Published by a LexisNexis Restructuring & Insolvency expert

Practice notes

Section 423 of the Insolvency ACT 1986 (IA 1986)

Section 423 provides a route to set aside dealings engineered to prejudice creditors. The regime is aimed at stopping parties from shifting assets in a manner that thwarts creditor claims. Put shortly, it targets arrangements by which assets are moved so creditors are kept at bay. A claimant may proceed under IA 1986, s 423 against a company or an individual following a Transaction at an undervalue (TUV) executed with the intention of placing assets out of creditors’ reach. Though there are parallels with a TUV under IA 1986, s 238 (for corporate insolvency) and IA 1986, s 339 (for personal insolvency), the following distinctions are central:

Relief under IA 1986, s 423 does not necessarily have to be connected to any formal insolvency proceedings
Under IA 1986, s 423 the transaction’s purpose is decisive, whereas under IA 1986, ss 238 and 339 the purpose is not a relevant criterion
IA 1986, s 423 requires no proof that the debtor was insolvent at the time of, or as a result of, the transaction; nor is there any requirement whatsoever that the debtor had creditors when the transaction occurred

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Web page updated on 21/05/2026

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