Dear Trustee - Rate of statutory interest

Dear Trustee

I would be grateful if you could bring the contents of this letter to the attention of staff who are involved in administering bankruptcy cases.

The Bankruptcy (Scotland) Amendment Regulations 2024 were laid in the Scottish Parliament on 15 February 2024. Subject to approval by the Scottish Parliament, they will come into effect on 6 April 2024 and will amend the prescribed rate of interest on preferred and ordinary debts.

Regulation 26 of The Bankrupcy (Scotland) Regulations 2016 prescribes the rate of interest payable under Section 129(10)(a) of The Bankrupcy (Scotland) Act 2016, between the date of sequestration and the date of payment of the debt. This is currently set at a fixed 8% per annum.

The intended effect of these regulations is to amend the prescribed rate of interest in cases with a date of sequestration of 6 April 2024 onwards, linking it to the Bank of England base rate, to more accurately reflect the prevailing rate of interest.

For all cases with a date of sequestration of 6 April 2024 or later, the prescribed rate of interest applicable to each appropriate case will be an annual rate of interest at the Bank of England base rate plus 2% at the date of sequestration. The rate will be fixed at the date of sequestration and will not vary during the course of the case.

The Regulations make no change to cases with a date of sequestration before 6 April 2024, for which the current prescribed rate of interest payable of 8% per annum continues to apply.

Yours faithfully,

Simon Roberts

Head of Operational Policy and Compliance