Could your transaction be voided if you buy a property previously bought undervalue?

portway72

SDLT_Geek said:

portway72 said

This is the reply from vendor solicitor :  

1. What was the reason for the transfer between company A to company B at Nil consideration?  That is a matter between the partied as you will note the funds were provided by company B

Is the background here that at the time the property went into the name of the company A, all of the money was provided by company B, so that company A was acting as a bare trustee?  

If so, the transfer from company A to company B would be a transfer of the legal estate, without the beneficial ownership moving.

If this is the background, then there was no transfer at undervalue.

Thank you for your coments,
answer to your question i have following copy of my solicitor question and vendor solicitors answer 

1.    From the documents provided, I can see that the property was transferred on 5th Feb 2021 from Jane  to company A for a consideration of £377,500.00   The property was then transferred again, on the same day from company A to company B for nil consideration.  Company B are now transferring the Title for a consideration of £382,000.00.  These companies do not seem to be linked. What was the reason for the transfer between Company A to Company B, at Nil consideration?

 They brought it on trust.

Thrugelmir

AdrianC said:

Thrugelmir said:

An administrator or liquidator has the power to apply to apply for a court order that would reverse the transaction, so restoring the situation to what it was if the sale or transfer had not taken place. That's written into Insolvency Law to stop the sale/transfer of company assets at under value. . 

Reverse the transaction from A to B, sure.

But the open market sale from B to the OP? Surely not unless there's strong evidence of collusion between the OP and A.

Without that evidence, it would be disproportionate for it not to simply become a question of the financial value of the transaction being due from B to A, not the reversion of the transfer.

It were that simple then it would be an open goal for fraudsters to transfer assets between limited companies at under value. Ensuring that a full recovery was in effect blocked. 

SDLT_Geek

portway72 said:

SDLT_Geek said:

portway72 said

This is the reply from vendor solicitor :  

1. What was the reason for the transfer between company A to company B at Nil consideration?  That is a matter between the partied as you will note the funds were provided by company B

Is the background here that at the time the property went into the name of the company A, all of the money was provided by company B, so that company A was acting as a bare trustee?  

If so, the transfer from company A to company B would be a transfer of the legal estate, without the beneficial ownership moving.

If this is the background, then there was no transfer at undervalue.

Thank you for your coments,
answer to your question i have following copy of my solicitor question and vendor solicitors answer 

1.    From the documents provided, I can see that the property was transferred on 5th Feb 2021 from Jane  to company A for a consideration of £377,500.00   The property was then transferred again, on the same day from company A to company B for nil consideration.  Company B are now transferring the Title for a consideration of £382,000.00.  These companies do not seem to be linked. What was the reason for the transfer between Company A to Company B, at Nil consideration?

 They brought it on trust.

OP needs to discuss this with their solicitor as this is where the answer might lie; company A acquired it on trust for company B which had provided the funds for the purchase.

portway72

SDLT_Geek said:

portway72 said:

SDLT_Geek said:

portway72 said

This is the reply from vendor solicitor :  

1. What was the reason for the transfer between company A to company B at Nil consideration?  That is a matter between the partied as you will note the funds were provided by company B

Is the background here that at the time the property went into the name of the company A, all of the money was provided by company B, so that company A was acting as a bare trustee?  

If so, the transfer from company A to company B would be a transfer of the legal estate, without the beneficial ownership moving.

If this is the background, then there was no transfer at undervalue.

Thank you for your coments,
answer to your question i have following copy of my solicitor question and vendor solicitors answer 

1.    From the documents provided, I can see that the property was transferred on 5th Feb 2021 from Jane  to company A for a consideration of £377,500.00   The property was then transferred again, on the same day from company A to company B for nil consideration.  Company B are now transferring the Title for a consideration of £382,000.00.  These companies do not seem to be linked. What was the reason for the transfer between Company A to Company B, at Nil consideration?

 They brought it on trust.

OP needs to discuss this with their solicitor as this is where the answer might lie; company A acquired it on trust for company B which had provided the funds for the purchase.

Thank you for your reply,       their solicitor is not giving a full explanation
This is the reply from the vendor solicitor :  

1. What was the reason for the transfer between company A to company B at Nil consideration?                                          That is a matter between the partied as you will note the funds were provided by company B

davidmcn

portway72 said:

SDLT_Geek said:

portway72 said:

SDLT_Geek said:

portway72 said

This is the reply from vendor solicitor :  

1. What was the reason for the transfer between company A to company B at Nil consideration?  That is a matter between the partied as you will note the funds were provided by company B

Is the background here that at the time the property went into the name of the company A, all of the money was provided by company B, so that company A was acting as a bare trustee?  

If so, the transfer from company A to company B would be a transfer of the legal estate, without the beneficial ownership moving.

If this is the background, then there was no transfer at undervalue.

Thank you for your coments,
answer to your question i have following copy of my solicitor question and vendor solicitors answer 

1.    From the documents provided, I can see that the property was transferred on 5th Feb 2021 from Jane  to company A for a consideration of £377,500.00   The property was then transferred again, on the same day from company A to company B for nil consideration.  Company B are now transferring the Title for a consideration of £382,000.00.  These companies do not seem to be linked. What was the reason for the transfer between Company A to Company B, at Nil consideration?

 They brought it on trust.

OP needs to discuss this with their solicitor as this is where the answer might lie; company A acquired it on trust for company B which had provided the funds for the purchase.

Thank you for your reply,       their solicitor is not giving a full explanation
This is the reply from the vendor solicitor :  

1. What was the reason for the transfer between company A to company B at Nil consideration?                                          That is a matter between the partied as you will note the funds were provided by company B

Yes, you've already told us that. I think SDLT_Geek means you should be discussing it further with your solicitor.

SDLT_Geek

davidmcn said:

portway72 said:

Yes, you've already told us that. I think SDLT_Geek means you should be discussing it further with your solicitor.

That is right.  The answer to the problem seems to be "hiding in plain sight"; Company A acquired as bare trustee for Company B.

portway72

SDLT_Geek said:

davidmcn said:

portway72 said:

Yes, you've already told us that. I think SDLT_Geek means you should be discussing it further with your solicitor.

That is right.  The answer to the problem seems to be "hiding in plain sight"; Company A acquired as bare trustee for Company B.

Thank you for your reply,  if i am purchasing from company B,  is this transaction be safe? 

davidmcn

If there's a transaction between connected parties I would always view it as having a risk of being at undervalue, no matter what you're told about the price - you don't know what was really going on behind the scenes.

portway72

davidmcn said:

If there's a transaction between connected parties I would always view it as having a risk of being at undervalue, no matter what you're told about the price - you don't know what was really going on behind the scenes.

Thank you davidmcn,  i am in a binding contract as i am purchasing from auction, seller solicitors not responding quick, so my solicitor saying that i am at risk on both side ( not completing and completing the transaction )  what my solicitor concern is if company A  goes to liquidation then creditors can claim on this property, but their solicitors saying that because money was providade by company B so thats not possible