Preferential Payments in Bankruptcy Amendment Act 1897

The Preferential Payments in Bankruptcy Amendment Act 1897 (60 & 61 Vict. c. 19) was an act of the Parliament of the United Kingdom, affecting UK insolvency law. It amended the category of "preferential payments" for rates, taxes and wages, to take priority over a floating charge in an insolvent company's assets. The act was passed in broad response to the decision of the House of Lords in Salomon v A Salomon & Co Ltd [1896] UKHL 1, [1897] AC 22.

Section 1 of the Preferential Payments in Bankruptcy Act 1888 (51 & 52 Vict. c. 62) first introduced the concept. It was amended by section 2 of the Preferential Payments in Bankruptcy Amendment Act 1897.

The provisions were re-enacted in the Companies (Consolidation) Act 1908 (8 Edw. 7. c. 69), the Companies Act 1929 (19 & 20 Geo. 5. c. 23) and the Companies Act 1948 (11 & 12 Geo. 6. c. 38).

Its provisions were largely ineffective as a floating charge would invariably crystallise into a fixed charge prior to enforcement. It was not until the Insolvency Act 1986 that the definition of floating charge was expanded to include any charge which was created as a fixed charge (i.e. irrespective of subsequent crystallisation).