Divorce & Business Assets
Understanding business assets on divorce
Expert family law advice on divorce and business assets for spouses, business owners, directors and shareholders - delivered by experienced business assets and divorce solicitors.
Understanding business assets on divorce
Divorce can be even more challenging when business interests are involved. Whether you or your spouse own a company, hold shares, or manage a family business, the impact of divorce on your commercial assets can be significant—and understanding how divorce can affect business interests and business assets is crucial in the UK.
Our expert family law solicitors specialise in cases involving business ownership. If you need a divorce solicitor with experience in business assets, we provide clear, strategic advice tailored to your unique circumstances, ensuring your interests are safeguarded throughout the process.
We take a proactive, strategic approach to negotiations and often work closely with our in‑house corporate and commercial teams to deliver seamless, joined‑up and commercially focused solutions. At Freeths LLP, you will benefit from combined expertise, clear advice and commercial pragmatism.
On divorce, business interests require more careful and nuanced treatment and there are often issues relating to (true) value, liquidity, and control.
Why business assets are treated differently on divorce
When a marriage ends, all assets can be considered by the court on division, including business interests. In England and Wales, the court’s goal is fairness, which often means treating a business as part of the marital estate. This can lead to questions such as:
- Whether my or my spouse’s business interests should be considered as matrimonial property?
- Can my spouse or I claim shares in the company as part of the divorce?
- Will I lose control of my business after divorce?
The answers can depend on a multitude of factors, such as the ownership structure of the business, existence (and terms) of any shareholders’ agreement, its trading history, the timing of incorporation (particularly whether this was before, during or after the marriage) and the value of the business interests compared to other assets in your case.
Our matrimonial lawyers have significant experience of divorce cases which include conventional business structures, share transfers between spouses, company buy-backs, Family Investment Companies (FICs), EOTs (Employee Ownership Trusts) and SPA transactions involving deferred consideration and loan notes. We can guide you on how the court interacts with different business structures and the court’s approach to valuing business assets (computation) and dividing them on divorce (distribution). We have also represented spouses with distressed businesses, including where limited companies have become insolvent or where parties have been or were at risk of becoming bankrupt.
Our experience involves businesses with valuations ranging from the modest (<£500,000) to very high (>£80 - £100m).
We offer a no-obligation initial consultation to understand your needs and assemble the best legal team for your case. You’ll find us approachable and supportive throughout the process.
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Will a business be treated by the court as a matrimonial asset?
Often, yes. Even if a spouse had no direct involvement, the court may view a business as part of the financial resources available for settlement. This does not necessarily mean splitting the business in half - indeed courts aim to avoid harming the viability of commercial interests on divorce wherever possible. Instead, the court may offset a business’s value against other assets in the case, or arrange for a lump‑sum payment (or payments over time).
Business valuations on divorce
Courts often require a formal valuation of businesses on divorce. This may require consideration of:
- Different valuation approaches
- Tangible assets owned by the business (such as any property or equipment)
- Intangible assets (such as goodwill/brand value); and
- Income streams and future earning potential
To address valuation evidence and ensure this is expressed fairly, our team works with trusted valuation specialists, including shadow and single joint experts—typically forensic accountants with an understanding of valuing businesses on divorce. As business assets and divorce solicitors, we ensure valuation evidence is robust and balanced.
Safeguarding business interests
There are various protective steps which may help to safeguard commercial interests from the impact of a future divorce:
- Shareholders’ agreements to define what happens if a shareholder divorces
- Prenuptial and postnuptial agreements to clarify your intended ownership of shares in a business, before and after marriage or in the event of separation
- Trust structures or the use of a Family Investment Company (FIC) to separate business and personal assets.
Don’t worry if you do not have a nuptial agreement or shareholders’ agreement in place - there are still steps you can take to minimise disruption in the event of divorce. Importantly though, avoid the temptation to make changes in contemplation of divorce without obtaining legal advice first from a specialist divorce solicitor.
Tax and financial implications
Divorce settlements involving businesses can trigger tax liabilities, including Capital Gains Tax, and planning ahead is essential to avoid unexpected costs. We advise on or work with other experts to assess:
- The potential tax consequences of a proposed settlement
- The most tax‑efficient way to structure settlement
- Asset transfers
- Liquidity issues and bottlenecks, including appropriate structuring to work around this
- Your longer‑term financial security; and
- Appropriate adjustments, such as key‑man and minority discounts or valuation discounts to reflect risk or liquidity problems
Options for settlement
Courts aim for fairness, not punishment. Common considerations and options on settlement may include:
- Lump sum payments – to achieve a clean break and enable business owners to retain control of their commercial interests
- Maintenance – payments based on income generated from a business, usually for a defined period as a spouse transitions towards independence
- Share transfers – negotiating ownership changes without disrupting day‑to‑day management or control
Our approach to business asset divorce
- Tailored advice from a matrimonial and commercial perspective
- Transparent fees and clear communication
- Support through negotiations and court proceedings
- Practical and creative solutions
- Commercial awareness
- Specialist input and support from market‑leading experts
Our team combines specialist family law expertise with in-depth corporate knowledge to handle complex cases effectively
Client settlements
Challenging an £80m business valuation during divorce proceedings
We represented an entrepreneur whose business was initially valued at over £80 million by a single joint expert. We challenged this valuation under a Daniels v Walker application and produced our own evidence, which demonstrated a significantly lower value.
Outcome: The court adopted our revised valuation of under £5 million.
Revealing trust structures to secure a fair divorce settlement
Our client, the wife of a successful businessman, discovered that marital assets and the family business were tied up in complex trust structures. Working with forensic experts, we proved these were accessible and revealed a much larger matrimonial acquest than claimed.
Outcome: Our client received a settlement aligned with the lifestyle enjoyed during the marriage.
Securing a fair share of unrealised business interests in divorce
Our client had unrealised business interests worth over £12m, but liquidity issues and sale agreement terms made future payments uncertain. We negotiated a discount to reflect risk and argued for adjustments based on post matrimonial endeavour.
Outcome: Our client retained around 75% of future value.
Resolving multi-jurisdictional business and trust disputes in divorce
We represented a spouse in proceedings involving multiple companies, properties, and over 15 trusts with multi-million-pound investments. Disputes arose over non-matrimonial property, earning capacity, and share transfers during proceedings. We engaged forensic experts and secured findings on key issues, including adding back shares transferred outside the estate.
Outcome: The court ruled in our client’s favour on major asset treatment issues.
Protecting shareholding and income in a long-term marriage divorce
We represented a wife in a contested divorce after 50 years of marriage involving an international business, property, and pensions. Our approach preserved her shareholding and income, while addressing overseas pension issues and planning matters.
Outcome: Our client remained involved in the family business and secured financial stability.
FAQs
Not necessarily and, in practice, rarely. Courts aim for fairness, which may involve offsetting other assets rather than splitting the business.
Shares can be transferred to one spouse, sold, or retained depending on the settlement terms.
The court may decide that business interests should be considered on divorce, but judges try to avoid interfering with shareholdings if this would harm a business’s viability. If both spouses held shares in a company then, on divorce, the court may explore whether it is preferable to arrange a transfer of shares into one party’s sole name to achieve a clean break.
No, courts rarely divide a business physically. Instead, they assess its value and may offset that value against other assets, or arrange a financial settlement which takes into account the value of business interests retained by one spouse.
Selling a business or disposing of shares before divorce can cause difficulties. If you are contemplating divorce, take early legal advice. If there is any change in ownership within close proximity to divorce (particularly three years before), this could be regarded by the court as a deliberate attempt to hide assets, which could harm your case.
If your spouse contributed to the business their claim may be stronger. Courts consider both direct and indirect contributions, but this will really come down to what role they played, over what duration and in what capacity. If your spouse earned an income through the business (for example through a salary, dividends or drawings) this could also be taken into account.
Courts aim to avoid disrupting business continuity, but financial settlements may impact liquidity or the ownership structure of a business.
Yes. These agreements can clarify ownership and reduce disputes during divorce.
Settlements involving businesses can trigger tax liabilities, including Capital Gains Tax. Planning ahead is essential.
Partnership agreements often include clauses for divorce scenarios. If not, negotiations may involve restructuring or buyouts. Similar considerations may apply.
Court rules require transparency and disclosure of what is usually fairly standard documentation, but not without some checks and balances. Do not be surprised if your spouse seeks or the court orders disclosure of full financial statements for the last two years, management accounts since the last year end or documentation such as cashflow forecasts, budgets and similar.
Complex cases involving business assets typically do take longer to resolve, often by several months or more, due to the time taken to obtain valuation(s) and negotiate.
Business liabilities are considered alongside assets and should be recognised within any valuation exercise.
Yes. Business‑related divorces require expertise in family law and commercial structures. A business assets and divorce solicitor can coordinate the right experts for a fair outcome.
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