Dear Trustee - Changes to trustee accounts process

Dear Trustee,

I would be grateful if you could bring the content of this letter to the attention of all your staff who are involved in the administration of your bankruptcies.

Following consultation with our bankruptcy stakeholder group members, I am writing to notify you of changes being made to the requirements of trustees when submitting accounts to the Accountant in Bankruptcy (AiB) in accordance with section 131 and 132 of the Bankruptcy (Scotland) Act 2016 (The Act).

In accordance with section 131 – Distribution in respect of accounting periods, the trustee is required to pay a dividend out of the estate in respect of each accounting period, if funds are sufficient, after making allowance for future contingencies.

If, however, the trustee is not ready to pay a dividend or considers it would not be cost effective to do so, the trustee may, with the consent of the commissioners or AiB, postpone the payment of a dividend until the next account period.

To assist the AiB in carrying out their functions under section 131(4) of The Act, the Accountant has decided to introduce the following operational processes to the submission of all bankruptcy accounts:

• AiB consider that where there are sufficient funds to pay an interim dividend (after making allowance for future contingencies), in respect of each accounting period, a scheme of division should be submitted for approval. AiB consider that 5p in £ (after making allowance for future contingencies) is a reasonable basis for sufficiency and wish to assess interim distribution requirements against that criteria
• in cases with funds, if the trustee is not ready to pay a dividend or considers it is not cost effective to do so, a note should be added to the account requesting to postpone the payment of a dividend and providing an explanation in support of this request. To assist AiB in assessing the request for postponement, the trustee should ensure an up to date statement of affairs is uploaded to BASYS or update the case debt section of BASYS, to inform the AiB of the known creditor position. The accounts team will raise an audit observation consenting to the request or will ask the trustee to accelerate the next account and pay a dividend
• on some occasions, where the funds in the case appear sufficient to pay a dividend, the trustee will be asked to provide an estimated outcome statement or a copy of the calculation used to determine funds are insufficient to pay an interim dividend of 5p in the £

To assist AiB in carrying out their functions in relation to sections 133(3) and 200(1)(a)(i) of The Act, AiB requires the trustee to provide an update on case progression with each account, by way of a note to BASYS or by uploading a document. This should detail the extent to which the debtor is complying with statutory matters, including the DCO and an update on the realisation of assets and outstanding matters.

This letter gives notice that these new requirements will be effective for all accounts submitted on or after 1 March 2025. The lead-in time to this change should allow trustees sufficient time to make appropriate adjustments to their processes and allow AiB to update our Notes for Guidance for Trustees.

Yours faithfully ,

Kimberley Kerr

Head of Bankruptcy and Accounts and Trustee Supervision