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The "Prescribed Part" - What is it"?

 

 

Where a floating charge was created after 15 September 2003, a portion of the distributable floating charge realisations are ringfenced for unsecured creditors, called the 'prescribed part'.

 

Calculation of the “prescribed part”

 

The amount available for distribution (after paying off fixed charge creditors, preferential creditors and secondary preferential creditors) is divided into two parts.

  • The “prescribed part”, which is made available to unsecured creditors, and
  • The remainder which is available for the floating charge holder.

The "prescribed part" is calculated as the sum of:

  • 50% of the first £10,000 of the total available and
  • 20% of any further funds available.

The amount that can be distributed as the prescribed part is subject to a statutory maximum of 800,000 for charges created on or after 5 April 2020 (600,000 if the charge was created between 15 September 2003 and 4 April 2020).

 

The prescribed part need not be applied if the amount available from floating charge funds for distribution ('net property') is less than 10,000.

 

 

For impartial, in-depth, one-to-one advice
contact us on 0161 438 8555 or

by email to info@jldllp.co.uk

 




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