Finance Act 2003

Debit for bad debt where parties connected and creditor insolvent E+W+S+N.I.

4 (1) Paragraph 6A of Schedule 9 to the Finance Act 1996 (c. 8) (bad debt etc: parties having connection and creditor in insolvent liquidation etc) is amended as follows. E+W+S+N.I.

(2) In sub-paragraph (1)—

(a) in paragraph (a), for “has gone into” substitute “ is in ”,

(b) for paragraph (b) substitute—

“(b) that company is in insolvent administration;”, and

(c) in paragraph (d), for “an event has occurred, or circumstances exist,” substitute “ circumstances exist ”.

(3) In sub-paragraph (2)—

(a) in paragraph (a) for “after the commencement” substitute “ in the course ”, and

(b) in paragraph (b) for “when the administration order is in force” substitute “ in the course of the administration ”.

(4) For sub-paragraph (3) substitute—

“(3) For the purposes of this paragraph a company is in insolvent liquidation during the period which—

(a) begins when it goes into liquidation, as defined in section 247(2) of the Insolvency Act 1986 or Article 6(2) of the Insolvency (Northern Ireland) Order 1989, at a time when its assets are insufficient for the payment of its debts and other liabilities and the expenses of the winding up, and

(b) ends when the winding up is completed or otherwise brought to an end (whether under paragraph 37 or 38 of Schedule B1 to the Insolvency Act 1986 or otherwise).

(4) For the purposes of this paragraph a company in administration is in insolvent administration if—

(a) in the case of an administration under Schedule B1 to the Insolvency Act 1986, it entered administration at a time when its assets were insufficient for the payment of its debts and other liabilities and the expenses of the administration, or

(b) in a case where an administration order has effect under Part 3 of the Insolvency (Northern Ireland) Order 1989, the order was made at such a time.”.