Other Techy Bits

Question 1

CRAR - pre petition

Answer 1

And 3 months prior to BO

T can claim rent back to the extent of pref shortfall

Landlord becomes 3rd pref creditor

Question 2

CRAR - post petition pre order

Answer 2

T can claim excess of 6 months rent plus shortfall to prefs

Landlord has 3rd preferential claim in respect of payment to prefs only

Question 3

CRAR - post BO

Answer 3

Must be before discharge

Landlord entitled to keep 6 months pre BO rent arrears

T can claim over and above

Question 4

CRAR conditions

Answer 4

Commercial property only - no element of residential

Owed 7 days rent

Notice of action 7 days

Done by HCEO

Question 5

CRAR / Execution - when has it been completed

Answer 5

When goods are sold

If HCEO has funds though has to be wait 14 days and if gets notice of BO must pay to T

Question 6

Who gives permission for private T to trade

Answer 6

CC or Court via OR

Question 7

What can we use to assess income and expenditure

Answer 7

Standard financial statement

Question 8

If bankrupt misses IPO / IPA payment what is result

Answer 8

S333 contempt of court
Discharge suspended
Application to take money from wages

Question 9

Insolvency Guidance Papers - Family Homes

Answer 9

• Consider impact on other occupants
• Ensure promptly dealt with
• Ensure relevant info given to all interested parties e.g guide to bankruptcy by IS
• communicate regularly at least every 12 months
• recommend legal advice

Question 10

Insolvency Guidance Papers - Succession Planning

What should continuity agreement state?

Answer 10

• when it comes into play
• extent / frequency of disclosure of case details and financial info
• steps to be taken and by whom
• access to working papers / practice files
• financial arrangements
• time frames
• PI arrangements
• Obligations of all parties

Should be filed with RPB and PI insurer

Should be reviewed at least annually

Question 11

Insolvency Guidance Papers - Succession Planning

What is overriding principal

Answer 11

Creditors should not be affected by change

Question 12

Where would you find info about creditor claims and where would you find voting rights?

Answer 12

Rule 14 and then Rule 15.31

Question 13

Order of priority - second bankruptcy

Answer 13

1. Unpaid expenses / costs of dealing with AAP or IPO by 1st T
2. Fees, costs and expenses of second T
3. Creditors of 2nd B
4. Unsatisfied balance from 1st B

Question 14

When is IHT not payable and when could it still arise?

Answer 14

If debtor dies after BO but might still arise on gifts in previous 7 years

Question 15

When does s283a not apply?

Answer 15

In an Insolvency Administration Order

Question 16

IAO - when does survivor pay debtors value lost in the estate of a property?

Answer 16

When death is within 5 years of IAO.

Question 17

SIP 3.1 - first meeting with debtor

Answer 17

Explain role of advisor

SIJ - us and them

Explain obligations to co-operate and full disclosure

Ensure debtor understands situation and consequences

Consider impact on family etc.

Debtor provided with
- adv and disadvantages
- costs

Confirm all in writing

Is an IVA right for me

Question 18

What additional clauses might be in IVA proposals?

Answer 18

Variation Clause

Extension Clause (can only be done from outset)

Excluded assets

After acquired assets

Restrictions to implement (on property for example)

Trust Clause

Question 19

What acronym do you use for the Nominees report?

Answer 19

FUCAR

IVAS ARE SHORT

Question 20

What is personal tax allowance?

Answer 20

£12,570

Question 21

What are the personal tax bands?

Answer 21

20% from PA to £50,270
40% to £150k
45% after £150k

Question 22

PVA - Small Co Moratorium criteria

Answer 22

T/O < £10.2m
Assets < £5.1m
Employees < 50

Not in Admin/WUC/PVA
Not had in previous 12 months

Note not available for CVAs

Question 23

When is OR Admin fee and general fee charged on annulment?

Answer 23

Charged in both IVA and payment in full. In ought never have been made - only Admin fee charged.

Question 24

What is the CGT allowance and tax bands?

Answer 24

£12,300
10% on gains up to £37,700
20% after

Question 25

What does bankruptcy order do to LPA Receiver?

Answer 25

End agency status of LPA so they are personally liable but may have bank indemnity

Question 26

What % of partners have to agree to :-

• PVA
• Proposal

Answer 26

100%
75%

Question 27

CGT - where does it rank in order of priority?

Answer 27

Pre-appt - unsecured
Post-appt - ahead of T remuneration in excess of Schedule 11 fees (even if LPA realised property)

Question 28

Describe a debt relief order

Answer 28

A formal order under which D gets protection and, later, relief from their debts.

Application by D through approved intermediary

No Court involvement as done through OR

Question 29

Breathing Space Moratorium - Describe it

Answer 29

D May apply to debt advice provider for BSM

D must obtain advice from debt advice provider

If D meets criteria and is in need of debt solution, application is made to SOS and entry made on individual insolvency register

Creditors will be notified by SOS

Lasts for 60 days unless cancelled or ends due to D

Question 30

IVA - how is after acquired income determined?

Answer 30

Reasonable Domestic Needs to be agreed between debtor and supervisor.

Otherwise Court to determine in line with IPO

It is for the Supervisor to determine whether surplus is available for creditors

Question 31

When can self-assessment tax returns be amended?

Answer 31

Within 12 months from January

Question 32

IVA clause - tax returns

Answer 32

• debtor will make relevant tax elections to maximise returns to creditors
• will bring tax affairs up to date
• will make provision in IVA for any tax arising

Question 33

IVA - what clause could you introduce if you identify a TUV and debtor not recompensing creditors?

Answer 33

Debtor may state that they are going to disprove the TUV I.e. prove solvency in this will be defence in any bankruptcy

Supervisor may suggest a clause to retain funds sufficient to bring s423 action against debtor and to report within 6 months.

Question 34

IVA - what can you do with foreign property where it is being realised?

Answer 34

Cannot put RX1 in place but could put legal mortgage over it pending a sale to wife / voluntary sale?

Question 35

Explain CGT in IVA

Answer 35

If CGT liability arises during tax year in which IVA implemented then unsecured claim (even if sold post IVA)

If CGT liability arises in subsequent tax years post appt then debtor obliged to pay outside of IVA but

Normally clause in IVA to state it’s a cost or if not HMRC add as a mod

Question 36

IVA - common provisions in Proposals outside of clauses and IA

Answer 36

• bring tax affairs up to date
• file returns on time
• debtor to ensure property fully insured and repairs completed
• provide quarterly accounts to supervisor
• supervisor to bank funds in recognised account
• supervisor to pay dividends at say 6 monthly intervals etc.
• powers of supervisor in line with bankruptcy e.g agreeing claims
• default provisions - calling meeting of creditors
• amount for post variation approval I.e 75%

Question 37

How might a Trustee deal with a lease

Answer 37

• Sell
• Disclaim if onerous
• Assign with consent of landlord (they cannot unreasonably withhold)
• Forfeiture if in terms of lease happens on BO
• Voluntary surrender