Property sale at under value from insolvent company
I have a client who has an insolvent building business which owns a residential property. The property has been on the market at £240k ish for several years with no luck in selling. The Revenue currently have security of the property for unpaid VAT and PAYE to the tune of £95k. The business is owned by a mother and son, the mother has a substantial directors loan which will never be repaid, there are a few other small liabilities totalling £25k. The nephew/grandson of the directors is able to raise funds to £130k to purchase the property. The company solicitors state this this will not be allowed as it is the sale at an undervalue and any subsequent liquidator could come back on this at a later date. As the company is insolvent there can be no indemnity insurance taken out against this possibility.
My suggestion is for the mother to gift cash of say £80k to the grandson who then buys the house for £210k (surely a reasonable market value?). He buys the property, all company debts settled and £80k of the DLA gets repaid to mother. Raising £80k in cash, albeit short term, may be an issue given her advancing years; her wealth is tied up in her residential property.
Alternatively would appointing a liquidator be of any use? Would they have a problem selling the property to the grandson for £130k given that it would satisfy all company debts?
Or is there some other way?
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