Forensic accounting on valuing a business

Our Forensic team is often engaged to assist with valuing family run businesses

What we do…

Whether for the purpose of settling a family dispute, divorce proceedings or assessing the value of a party’s interest on exiting a business, we are here to help.

We work closely with our tax team to identify practical methods of mitigating the taxes payable on the disposal or transfer of shares so that you achieve the best financial settlement possible.

For example…

We were engaged to prepare a valuation of a family run haulage company in the context of a divorce. The company was owned by the husband and his two brothers and operated from land owned personally by the brothers.

Valuing the business

Initially the valuation appeared quite straight forward as the business had been established and operated profitably for many years. Problems arose, however, when considering the assets of the business where the line between personal and business had become blurred. The company was operating from and had made significant improvements to property owned by the brothers, including constructing buildings. With no lease in place, the value of these buildings was attributable to the brothers personally and the value of the company diminished by an equal and opposite amount.

Forensic accounting on valuing a business
Tax aspect

Further, as the buildings were effectively gifted to the brothers by the company, there were personal tax implications to consider.

Assets

For owners of smaller family-run companies it can be difficult to differentiate between business and personal assets. We understand that this is something that only matters once circumstances change. It’s not an issue from day to day but, in the event of a dispute or shareholder departure, it is important to be able to distinguish between the two. Sometimes unpicking the position can lead to some unexpected (and unwelcome) consequences, particularly with regard to the tax position. Whilst we can help with these we always recommend putting in place appropriate documentation in advance and are happy to discuss what you require.

For more information

You can find out more about our forensic accounting service, or call us on:

01483 416232