A family solicitor has warned that divorce can become even more complex when a business is involved.
Gurdip Brring, a partner at Worcestershire-based mfg Solicitors, said that in such cases, the business is likely to be considered a matrimonial asset and included in a financial settlement.
She stressed the importance of obtaining an independent valuation of the business before including it in the pool of matrimonial assets.
‘So very sad’ – Community shares shock after body found in burnt-out car
Five events this weekend in Worcester worth a visit
Ms Brring said: “There are three key considerations to be aware of when dealing with a business in divorce proceedings. Those are its valuation, liquidity and tax consequences.
“Each can have an important role to play in understanding the overall value of the business and how it may be taken into account when reaching a final financial settlement.”
“This is a necessary exercise, as getting a clear understanding of the value of the business can establish how it should be considered alongside the other matrimonial assets and liabilities.
“Consideration must also be given to liquidity and whether there are sufficient funds available within the business to facilitate a settlement or buy out one spouse’s interest. It’s also important to think about the potential impact this could have on the business’s liquidity and cash flow, as well as its ability to continue trading and generating an income.”
She also advised that tax implications should not be overlooked when extracting funds from a business, adding: “Depending on the circumstances, extracting cash can result in significant tax liabilities, so taking appropriate expert advice from the outset can help establish the most tax-efficient way of releasing funds.”
Mfg Solicitors has offices in Worcester, Birmingham, Kidderminster, Bromsgrove, the Black Country, Ludlow and Telford. Anyone seeking more information on family law matters can contact Gurdip Kaur-Brring at gurdip.brring@mfgsolicitors.com.
