Notes for Guidance - Protected Trust Deeds - Bankruptcy (Scotland) Act 2016

A trust deed can be granted by a living individual, or by any of the entities that are entitled to apply for their own bankruptcy under Section 6 of the 2016 Act. A trust deed can be granted by a partnership or a limited partnership, but not by a limited company or limited liability partnership.

A trust deed must only be granted for a single estate. A trust deed granted on behalf of a partnership is granted in respect of the estate of that partnership. Insolvent partners must grant separate trust deeds if they wish to include their personal assets and liabilities. A trust deed granted by a partnership does not protect the partners from bankruptcy for their personal debts nor discharge them personally from liability for partnership debts.

A couple cannot grant a joint trust deed. This includes a married couple, civil partnership, or those in a similar relationship even if there is estate held in common with the other person.

A trust deed cannot be granted by a debtor if they:

• are or have been bankrupt and their trustee has not been discharged, (Section 164(2)(a) of the 2016 Act)
• are an entity referred to in Section 6(2) of the Act (a company registered under the Companies Act 2006 or an entity in respect of which sequestration is incompetent)
• have total amount of debts of less than £5,000