Changes to SIP 16 and SIP 13 for Northern Ireland
The Administration (Restrictions on Disposal etc. to Connected Persons) Regulations (Northern Ireland) 2021, which came into effect on 25 June 2021, impose additional obligations on connected person purchasers in administrations.
These legislative changes mean that it has been necessary to make changes to two Statements of Insolvency Practice (SIPs) to align the content of the standards with the law now in effect in Northern Ireland. The updated SIPs are:
SIP 16 – pre-packaged sales in administrations
SIP 13 - disposal of assets to connected parties in an insolvency process
No changes have been made to the SIPs other than those required by the changes in the law.
The Joint Insolvency Committee previously amended SIP 16 to remove references to the Pre-Pack Pool and to replace these with references to the statutory obligation placed on a connected-person purchaser to obtain a qualifying report from an evaluator or creditor approval. The regulations apply to transactions that take place within 8 weeks of the appointment of an administrator. This extends the scope of the regulations beyond pre-pack administrations to all administrations within that time frame. That means equivalent changes had to be made to SIP 13 as it applies to any connected party transaction in an insolvency process.
Going forward, both SIPs will apply throughout the United Kingdom, albeit with different “effective from” dates and different legislative references for the definition of connected parties, (paragraph 60(A)(3) of Schedule B1 to the Insolvency Act 1986 in England, Wales and Scotland or, for Northern Ireland, paragraph 61A(3) of Schedule B1 to the Insolvency (Northern Ireland) Order 1989.
SIPs 13 and 16 Northern Ireland have therefore been replaced by the corresponding SIPs for England, Wales and Scotland, revised as above to become UK-wide SIPs.
The effective dates for the revised SIPs 13 and 16 are:
30 April 2021 (England, Wales and Scotland)
25 June 2021 (Northern Ireland)
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