It is common for business assets to be held at the beginning of, or to be acquired during the period of, a relationship. Upon divorce or separation, the liquidity of these assets will be reviewed and assessed to determine whether or not the assets can be used to provide cash for settlement purposes or income to one or both of the parties going forward.
Our team of forensic accountants can assist in proceedings by considering the liquidity of business assets held. We assess the financial needs of the business and can recommend methods for extracting cash in a manner which is sympathetic to future business prosperity, commenting on the tax implications of such actions.
Where business assets are to be retained by one of the parties as an income generating vehicle, we assess the sustainable income that can be expected to be generated in the future. This helps to determine the future income of the parties in a situation where an ongoing maintenance order is the most viable means of achieving a financial settlement.
Case examples:
Sustainable income following loss of contract
Appointed by the husband to assess the sustainable income that he could expect to draw from his business in the context of divorce proceedings. The company had recently lost its largest contract and replacement sources of income were yet to be identified.
Where income was unsustainable
Appointed by the wife’s solicitors to comment on the expected future income of the husband who operated a retailer of car parts. The wife was accustomed to the husband drawing high levels of cash from the business and therefore expected future earnings to remain consistent, however we identified that the husband’s drawings were unsustainable and that his future income would be significantly lower as a result.
Current sustainable income of husband and impact if company was liquidated
Appointed as single joint expert to opine on the turnover and net sustainable income of a company operating in the plastic surgery market in the context of a matrimonial dispute. We were also instructed to comment on the level of capital that should be retained by the company and therefore the capital available for extraction, as well as the net capital and income position of the husband if the company was liquidated.
Sustainability of pension income
Appointed as single joint expert in matrimonial proceedings to value the husband’s interest in a family owned haulage business. Also instructed to comment on the taxation implications of a sale or transfer of shares, the liquidity of the business and the status and sustainability of pension income receivable by the husband from the company.