What is a Prescribed Part?

Published on : 10th September, 2020
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A prescribed part is the part of the proceeds from realising the assets covered by a floating charge, that is set aside and kept available, so it can satisfy any unsecured debts. This is a part of section 176A of the Insolvency Act 1986 and the Insolvency Act 1986 (Prescribed Part) Order 2003.

On 6 April 2020, the Insolvency Act 1986 (Prescribed Part) (Amendment) Order 2020 came into force. This order amends the Insolvency Act 1986 (Prescribed Part) Order 2003, and increases the maximum amount of the prescribed part from £600,000 to £800,000.

To calculate the prescribed part, you get a percentage of the value of the company’s property that is subject to a floating charge. Typically, 50% of the first £10,000 of net floating charge realisations plus 20% of anything after, subject to a maximum prescribed part of £800,000.

Prescribed parts can be disapplied if:

  • The company’s net property is less than £10,000
  • The insolvency practitioner thinks the cost of making a distribution would be disproportionate to the benefits
  • The net property exceeds the minimum
  • Court order disapplication.

For more information on prescribed parts, or if you are a worried creditor with a floating charge, contact us today on 0800 970 0539.

Keith Steven

Written ByKeith Steven

Turnaround Director


07879 555349

Keith is the Turnaround Director of RMT KSA Insolvency Practitioners which has been established for 25 years. The company has undertaken more CVA led rescues than any other firm. Read our case studies to see how.

Keith Steven

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