Catherine Rawlin examines the links between business valuations & divorce
Figures published last month by the Office for National Statistics show divorce rates are at their lowest rate since 1979. This flies in the face of expert predictions, which forecast that the recession would drive up divorce rates. Could there be financial reasons for this unexpected result? Areas where the current economic climate is having an impact on divorce include the valuation of businesses, and also the ability to release funds from the business to enable a financial settlement to occur.
Matrimonial pot
Clearly a business that is at the centre of a divorce may belong to the husband, the wife, or both of them. For current purposes, I assume a scenario where the husband owns and runs the business. In the event of a divorce, the business would be treated as the husband’s asset and it would need to be valued, along with other assets, to arrive at the overall matrimonial pot available for the settlement. In preparing such a valuation, recessionary effects must be considered.
First, if the
