20.4 THE INCURRENCE OF A DEBT
If the distribution takes the form of a debt or other obligation the requirements of this section apply when the board takes the decision to take on the debt. The time when the solvency and the liquidity test is satisfied is generally immediately after completing the proposed distribution. However, there is an exception and this is in regard to the incurrence of a debt in which case the timing must be when the board resolves to incur the debt. The company must satisfy the test when the board resolution is done unless the board resolution provides otherwise.
S 46 (4) says;-
(4) If a distribution takes the form of the incurrence of a debt or other obligation by the company, as contemplated in paragraph (b) of the definition of “distribution” set out in section 1, the requirements of this section—
(a) apply at the time that the board resolves that the company may incur that debt or obligation; and
(b) do not apply to any subsequent action of the company in satisfaction of that debt or obligation, except to the extent that the resolution, or the terms and conditions of the debt or obligation, provide otherwise.