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Section 423: Transactions defrauding creditors.

Insolvency Act 1986 · 1986 c. 45View on legislation.gov.uk

Part XVI: Provisions Against Debt Avoidance (England and Wales only)

This section relates to transactions entered into at an undervalue; and a person enters into such a transaction with another person if—

he makes a gift to the other person or he otherwise enters into a transaction with the other on terms that provide for him to receive no consideration;
he enters into a transaction with the other in consideration of marriage or the formation of a civil partnership; or
he enters into a transaction with the other for a consideration the value of which, in money or money's worth, is significantly less than the value, in money or money's worth, of the consideration provided by himself.

Where a person has entered into such a transaction, the court may, if satisfied under the next subsection, make such order as it thinks fit for—

restoring the position to what it would have been if the transaction had not been entered into, and
protecting the interests of persons who are victims of the transaction.

In the case of a person entering into such a transaction, an order shall only be made if the court is satisfied that it was entered into by him for the purpose—

of putting assets beyond the reach of a person who is making, or may at some time make, a claim against him, or
of otherwise prejudicing the interests of such a person in relation to the claim which he is making or may make.

In this section "the court" means the High Court or—

if the person entering into the transaction is an individual, any other court which would have jurisdiction in relation to a bankruptcy petition relating to him;
if that person is a body capable of being wound up under Part IV or V of this Act, any other court having jurisdiction to wind it up.

In relation to a transaction at an undervalue, references here and below to a victim of the transaction are to a person who is, or is capable of being, prejudiced by it; and in the following two sections the person entering into the transaction is referred to as "the debtor".

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This legislation text comes from legislation.gov.uk. Contains public sector information licensed under the Open Government Licence v3.0. These source and reuse terms cover the legislation text, not Remedy's commentary.

Reuse reviewed 21 August 2026 under Open Government Licence v3.0.