Services
Business Valuation in Divorce Proceedings
Independent expert valuation of businesses, company interests, and professional practices in matrimonial proceedings.
Overview
Independent expert valuation of businesses, company interests, and professional practices in the context of matrimonial proceedings. Covers SMEs, family businesses, professional partnerships, and shareholdings in private and listed companies. Multiple valuation methodologies, earnings-based, asset-based, market comparables, and discounted cash flow, are considered, disclosed, and justified in the expert report.
Valuation methodology and assumptions are disclosed in accordance with FPR Part 25 and Practice Direction 25B (England & Wales), and equivalent Scottish and Northern Ireland court requirements.
When to instruct
Where one or both parties own a business and its value is in dispute, or where a fair value must be established for settlement purposes.
Valuing Businesses in Matrimonial Proceedings
Where one or both parties hold an interest in a business, its value is often central to the financial remedy outcome. The court requires a fair valuation based on reliable methodology, not a figure chosen to favour either party. A single joint expert is frequently appointed to value trading companies, professional practices, and minority shareholdings.
Our valuations follow recognised approaches under the International Valuation Standards and RICS guidance, adapted for the matrimonial context and the specific questions in the letter of instruction.
Valuation Methodologies
- Earnings-based: EBITDA or maintainable profit multiples, adjusted for owner remuneration and related-party transactions
- Asset-based: net asset value for investment holding companies and asset-rich businesses
- Market comparables: quoted company multiples and private transaction data where available
- Discounted cash flow: where future earnings projections are reliable and verifiable
- Minority discounts: analysis of lack of control and marketability for non-controlling interests
Common Issues in Divorce Business Valuation
- Normalisation of director remuneration and personal expenses through the business
- Identification of matrimonial versus non-matrimonial value (pre-marital, inherited, or post-separation accrual)
- Valuation date disputes and whether the business has increased in value during separation
- Family businesses with inter-generational ownership and succession planning structures
- Professional practices: goodwill, work in progress, and lock-in provisions
- Companies held through trusts or offshore structures
Expert Report Requirements
Business valuation reports for financial remedy proceedings are prepared to FPR Part 25 and Practice Direction 25B. The expert discloses all assumptions, explains the chosen methodology, and provides a range of values where appropriate. The report must withstand scrutiny at FDR and final hearing, including cross-examination on valuation assumptions.