Bill and I have only come across a very small number of cases where the prescribed part has applied, and this is also the case for the monitors acting for the regulators. Consequently, and in the absence of any guidance from the courts, the regulators do not yet have an agreed approach on what costs and expenses can be deducted by an office holder when calculating the amount of the company’s net property.
What they are agreed on, however, is that the approach set out by HM Revenue and Customs in their technical manual (www.hmrc.gov.uk/manuals/insmanual/ins961.htm), whereby the net property is “floating charge assets after accounting for preferential debts and costs of realisation and trading losses when trading has continued”, is incorrect.
As soon as Bill or I find out something more definitive about the approach of the regulators then we will post another article on the Blog.
