Scotland: corporate insolvency

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Acknowledging the importance of Scottish insolvency law to our customers we have developed a set of content on Scottish insolvency law for Scottish practitioners. The content provides an essential resource for Scottish practitioners while the guidance about the differences between insolvency law in Scotland and England and Wales will assist practitioners in England and Wales in cross-border transactions where it is necessary to have an understanding of insolvency law in Scotland.

Scotland collection

The Scotland collection is a research tool collating guidance on key areas of law that are specifically relevant to Scotland. The collection brings together Scots-law content from across a number of practice areas and includes links to Practice Notes, Checklists and Q&As as well as legal articles and analysis on legal issues directly affecting Scotland. See: Scotland collection.

The experts and market standard

The scope and content of the Scottish insolvency law topic is being developed in collaboration with leading experts in Scottish insolvency practice:

  1. •

    David Menzies of ICAS (Institute of Chartered Accountants Scotland)

  2. •

    Tim Cooper of Addleshaw Goddard LLP

  3. •

    James Lloyd of Harper Macleod LLP

  4. •

    Eileen Maclean of Insolvency

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Latest Restructuring & Insolvency News

HMRC guidance – Transfer a business out of a company

HMRC has published a new guidance document called Transfer a business out of a company.

Insolvency Service reports maximum 15-year director disqualification for loan and VAT fraud

The Insolvency Service has reported that Felix Milton has been disqualified from acting as a company director for 15 years, following a High Court hearing on 4 November 2025. Milton submitted falsified bank statements for his company, The Nameless Ltd, altering documents to show balances of £7.6m when the actual balance was £3.20. This enabled him to obtain a £150,000 government-backed Recovery Loan Scheme loan. He also secured a £179,444 VAT refund from HM Revenue and Customs (HMRC) using falsified statements and fake purchase invoices, and attempted to claim a further £4.3m in VAT refunds before HMRC detected the fraud. The disqualification order took effect on 25 November 2025, and Milton was ordered to pay £10,826 in costs. The order prevents him from being involved in the promotion, formation or management of a company without court permission until November 2040. Further Insolvency Service enquiries into Milton are ongoing.

Trustees' standing for annulment of bankruptcy order clarified (Nilsson and another v Jones)

Restructuring & Insolvency analysis: This case clarifies that trustees in bankruptcy (trustees) have standing to apply for annulment under section 282 of the Insolvency Act 1986 (IA 1986), as Parliament has not excluded any category of applicant. The court determined that trustees, as officers of the court, have a legitimate interest in seeking annulment when unable to fulfil their statutory functions. The case also addressed cross-border insolvency issues, particularly regarding centre of main interests (COMI) and jurisdictional requirements post-Brexit. The court emphasised the importance of properly pleading all grounds in application notices rather than introducing new arguments in skeleton arguments. Significantly, while finding the bankrupt's COMI was in Austria, the court allowed the trustees to challenge domicile grounds following proper notice, demonstrating the court's procedural fairness in ensuring parties have adequate opportunity to address all issues. Practical implications written by Laura Newbery, associate, Addleshaw Goddard LLP.

Insolvency Service reports finance company shut down after fraud investigation

The Insolvency Service reports that Basic Prime Limited was wound up following an investigation that revealed fraud concerns. The company, which purported to offer trade finance guarantees and credit enhancement services, received US$231,000 (approximately £175,000) from a client in May 2024 for arranging a US$500m financial guarantee. However, it failed to deliver the promised services and ceased communication with the client by September 2024. Basic Prime Limited was never registered as a financial services provider with the Financial Conduct Authority (FCA). The investigation further uncovered that the company had no genuine business presence at its registered address in Croydon, maintained non-operational contact details, and had a director who did not provide the requested information or documents. Despite receiving the client fee and misrepresenting its banking arrangements, the company filed dormant accounts. The Official Receiver has now been appointed as the liquidator of Basic Prime Limited.

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