Q&As
If a joint owner ('the former joint owner') transfers their interest to the other joint owner for no consideration, the remaining joint owner sells to a buyer within five years and the former joint owner becomes bankrupt, can the former joint owner's trustee disturb the transfer to the buyer or claim compensation/damages/payment from the buyer by reason of a transfer at an undervalue by the former joint owner?
Bankruptcy and transactions at undervalue
Section 339 of the Insolvency Act 1986 (IA 1986) provides that the trustee of a bankrupt’s estate may apply to the court for an order setting aside a transaction at an undervalue entered into ‘at a relevant time’. The court will make such order as it thinks fit to restore the position that would have pertained but for the transaction. IA 1986, s 339(3) provides that a transaction is at an undervalue if a person makes a gift or otherwise enters into a transaction on terms that provide for them to receive no consideration; enters into a transaction in consideration or marriage; or enters
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