Forfeiture Definition

GLOSSARY

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What does Forfeiture mean?

Forfeiture is the lost right to possession.

There are many statutory powers of forfeiture. For example, under s 298 of the Proceeds of Crime Act 2002 a court may order the forfeiture of cash if it is satisfied that the cash is recoverable property (as that term is defined) or it is intended by any person for use in unlawful conduct.

Corporate Crime

Forfeiture is the lost right to possession.

Pensions

Term describing termination or suspension of all or part of the benefits payable under a scheme. Forfeiture can take place in limited circumstances set out in sections 91–94 of the Pensions Act 1995.

Most occupational pension schemes, and an increasing number of personal pension plans, include forfeiture clauses, also known as spendthrift clauses or protective trusts. If a member becomes bankrupt, his rights are forfeited and the money goes to the trustees who look after it until he is discharged from bankruptcy – when the trustees can give it back. Forfeiture clauses should be distinguished from set-off or lien clauses (which are sometimes called forfeiture clauses) where a member loses pension

View the related checklists about Forfeiture

Sentencing Guidelines for Corporate offenders—Money laundering checklist

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Cash searches—checklist

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Surrender and forfeiture of pension benefits

THIS PRACTICE NOTE APPLIES TO OCCUPATIONAL PENSION SCHEMES ONLYThis Practice Note considers the extent to which accrued pension rights under registered occupational pension schemes can be surrendered or forfeited.The general rule against surrender—the inalienability ruleUnder section 91(1) of the Pensions Act 1995 (PA 1995), a person’s entitlement in respect of accrued benefit rights under a registered occupational pension scheme cannot be assigned, commuted, surrendered or charged, and no lien or set-off can be exercised in respect of it. Furthermore, any agreement to effect any such thing is unenforceable. This rule is known as the inalienability rule.In circumstances where the inalienability rule applies, section 91(2) provides that no order can be made by any court that would restrain an individual from receiving their occupational pension; however, under section 91(4), this does not prevent the making of attachment of earnings orders (under the Attachment of earnings Act 1971) or income payment orders (pursuant to the Insolvency Act 1986) in respect of income derived from a pension scheme.Note that there is no equivalent...

Forfeiture of property following conviction

The power of the court to order the forfeiture of property under the Sentencing Act 2020The Sentencing Act 2020 (SA 2020), also known as the Sentencing Code, is the principal source of the court's power to order the forfeiture of property connected with the commission of a criminal offence. The order is known as a 'deprivation order' and can be made by the Crown Court or a magistrates' court in respect of any offence.The procedure to be followed by the courts when making such orders is detailed in Practice Note: Restitution and deprivation orders.Other statutory powers of forfeiture Various statutes grant the courts the power to order the forfeiture of items following conviction for certain offences should the court consider it appropriate to do so. Practitioners should always check the individual statutory provision creating the offence on which they are advising in order to identify whether provision is made for the forfeiture of property in respect of the offence that it creates.Examples of some of the most common statutes containing...

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Part 26A restructuring plan for SMEs

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Underlease of whole by way of reference to the terms of the head lease

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Dive into our 118 Precedents related to Forfeiture

Could a clause requiring consultants to pay back any shortfall in their billing target be treated as a penalty clause?

Could a clause requiring consultants to pay back any shortfall in their billing target be treated as a penalty clause? This Q&A examines liquidated damages and penalty clauses in the context of the following example scenario: The NHS pays a dental practice a set amount per year for the treatments it provides. If the practice doesn't meet its target, it must pay the shortfall to the NHS. Under the relevant dental consultancy agreement, dentists have an annual treatment target and get paid for each treatment performed. If the contract is terminated early, there is a clause which provides that the practice may require the consultant to pay back any shortfall in their pro-rated treatment target, to the extent that the shortfall has not been performed by any other consultant as at the date of termination. The question is, could a clause requiring consultants to pay back any shortfall in their billing target be treated as a penalty clause? Contractual liquidated damages clauses (a clause where the...

A liquidator has disclaimed a commercial lease following the tenant going into voluntary creditors’ liquidation. The notice of disclaimer has been issued by the liquidator and served on the relevant parties. Can the landlord take immediate possession of the premises by peaceful re-entry or does the landlord have to wait 14 days to see if any interested party applies for a vesting order before taking possession?

A liquidator has disclaimed a commercial lease following the tenant going into voluntary creditors’ liquidation. The notice of disclaimer has been issued by the liquidator and served on the relevant parties. Can the landlord take immediate possession of the premises by peaceful re-entry or does the landlord have to wait 14 days to see if any interested party applies for a vesting order before taking possession? Disclaimer is an entirely statutory procedure which is governed by the Insolvency Act 1986 (IA 1986) and the Insolvency (England and Wales) Rules 2016 (IR 2016), SI 2016/1024. In the case of liquidation, the relevant provisions are found in IA 1986, ss 178–182 and in IR 2016, SI 2016/1024, rr 19.1–19.11. Disclaimer is effected by the liquidator authenticating and dating a notice of disclaimer. Within seven business days of dating of the notice of disclaimer, the liquidator must then deliver or serve copies of the authenticated and dated notice of disclaimer to all persons who to the liquidator’s knowledge are persons interested as described...

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Examining UK and EU approaches to sanctions enforcement

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Risk & Compliance weekly highlights—14 November 2024

This week's edition of Risk & Compliance weekly highlights includes: the releasing of a report highlighting the data protection concerns arising from the use of genomics by the Information Commissioner's Office (ICO), the latest financial sanctions, the publication of the November 2024 Suspicious Activity Reports (SARs) reporter booklet by the UK Financial Intelligence Unit (UKFIU) and EU due-diligence reporting duties to be simplified with an ‘omnibus’ regulation.

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GLOSSARY