The value of a business and its income will be considered an available resource of the marriage on divorce.

That is not to say that the family court would order a sale of the business.

The court recognises that the business provides an income, the loss of which may have catastrophic consequences.

In family court proceedings, the value of a business is often determined by a forensic accountant who is jointly appointed by the solicitors representing each spouse to advise on the following:

  • The value of the business after tax.
  • Whether there is any available cash in the business which can be extracted and, if so, what would be the tax implications.
  • What the business earner can reasonably earn from the business now and in the future.

The court typically looks at the value of a shareholding in a business at a true market value.

It will look to obtain a valuation that a willing buyer would pay to a willing seller for that shareholding.

When to value a business?

Businesses are valued when one or both spouses have an interest in the business.

Businesses can be valuable as a means to generate income, but they can be valuable capital assets in their own right.

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