How is a business valued in divorce proceedings?

In financial remedy proceedings, the business is treated as a matrimonial asset. The expert applies an appropriate valuation method - typically maintainable earnings for trading businesses - and produces a report compliant with FPR Part 25. Courts focus on realistic realisable value, not theoretical maximum value.

What is personal goodwill in a divorce valuation?

Personal goodwill is the value attributable to the individual owner's skills, reputation, and relationships rather than the business itself. In divorce cases, courts often reduce the business value to exclude personal goodwill on the basis that it would not transfer on a sale - it is not available for distribution as a matrimonial asset.

Divorce & Financial Remedy Business Valuation Expert Witness

When a spouse owns or controls a trading company, the business often forms the largest matrimonial asset in financial remedy proceedings. The Family Procedure Rules Part 25 governs expert evidence: in many cases the court's permission is required before a valuation expert may be instructed, and the expert's overriding duty is to the court.

Expert witnesses assess maintainable earnings, personal versus business goodwill, and realistic realisable value - not theoretical maximum figures. They work with Form E disclosure, respond to add-back arguments for excessive drawings or undisclosed income, and produce reports compliant with FPR Part 25 and Practice Direction 25A.

Matrimonial valuations frequently involve owner-managed SMEs, professional practices, and companies with complex capital structures. Sector-specific expertise (law firms, dental practices, technology businesses) ensures appropriate multiples and normalisation adjustments.

Common questions

How is a business valued in divorce proceedings?: In financial remedy proceedings, the business is treated as a matrimonial asset. The expert applies an appropriate valuation method - typically maintainable earnings for trading businesses - and produces a report compliant with FPR Part 25. Courts focus on realistic realisable value, not theoretical maximum value.
What is personal goodwill in a divorce valuation?: Personal goodwill is the value attributable to the individual owner's skills, reputation, and relationships rather than the business itself. In divorce cases, courts often reduce the business value to exclude personal goodwill on the basis that it would not transfer on a sale - it is not available for distribution as a matrimonial asset.

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