How Is A Business Valued In Divorce?

A business valuation in divorce estimates what your ownership interest is worth and what money the business can provide. If you and your spouse disagree on value or available cash, you may need a jointly instructed accountant, and the valuation should reflect the business’s circumstances.

Miniature model of a British brick shopfront beside a brass magnifying loupe and a leather ledger, representing a business valuation in divorce.

Last reviewed: October 2026
Reviewed by: Pauline Purcell

If you are divorcing your spouse and have business assets, it is crucial they are valued correctly so you can reach a fair financial settlement. The business may provide much of your income and hold most of your family’s wealth. Before it can assess what constitutes a fair divorce financial settlement, the court will need reliable evidence of your shares’ value and the cash available. Here we explain what you must disclose and how an accountant may value your business.

What must I disclose?

You must give full and accurate information about all your business interests, including:

the nature of the business
the extent of your interest
an estimate of its current value, and
any Capital Gains Tax that would arise on disposal.

You must attach accounts for the last two financial years and any available documents supporting your estimate.

You should identify any director’s loan account and benefits received from the business. Current management figures may explain changes since the last annual accounts. Shareholders’ agreements can contain sale restrictions or voting provisions that affect what a buyer would pay for your holding. Our guide to financial disclosure on divorce explains the wider information both spouses should provide.

Do I need an independent accountant, and can they be an expert witness?

You may find it helpful to engage an independent accountant if the value can’t be agreed based on the records or if the available cash is disputed. Before commissioning a report, clearly define the questions you’d like it to address so the work, and its cost, stay proportionate.

If your accountant is preparing an expert witness report for the court in financial remedy proceedings, permission must first be obtained. In addition, under Part 25 of the Family Procedure Rules 2010 permission will be granted “only if the court is of the opinion that the expert evidence is necessary to assist the court to resolve the proceedings.”

Before instructing anyone, agree the expert’s qualifications, the valuation date, the documents to be reviewed and the questions the report must answer. The court may direct both spouses to use one single joint expert.

How will the accountant value my business in a divorce financial settlement?

The accountant will select a valuation method that fits the business and explain the assumptions used. ACCA guidance on business valuations describes several recognised approaches. The report may use one method as its main calculation and another to check whether the result is reasonable.

Method	What it examines
Earnings	Maintainable profits and an evidence-based multiple.
Net assets	Current asset values after debts and liabilities.
Discounted cash flow	Expected future cash converted to a present value.
Market evidence	Prices for comparable businesses, adjusted for differences.

Your accountant should take a close look at the shares you own and the rights that come with them. A minority holding, limits on selling, or limited control may lower the value, although there’s no automatic, fixed discount. The value may also be lower if the business depends on your work and customers might leave when you do.

The cash you can extract from a business may be lower than its valuation. Property and equipment cannot always be sold without harming trade. The company may also need working capital for wages, tax, supplier bills and loan repayments. The valuer can assess available cash separately from value.

Money must be extracted lawfully with all the relevant tax paid. Government guidance on taking money from a limited company states that dividends cannot exceed available profits. A settlement may therefore use other assets or a lump sum paid over time. Our business assets and divorce team can work with your accountant to work out an appropriate solution.

Frequently asked questions

Will I have to sell my business if I get divorced?

You won’t necessarily have to sell your business. You may be able to keep it if the overall settlement meets both spouses’ needs. Other assets, staged payments, or a sale at a later date may also offer a workable solution.

Will my divorce solicitor work with my accountant?

Your accountant can help prepare records and explain past performance. If court evidence is needed, the proposed expert must be independent, suitably qualified, and permitted by the court. Your solicitor will work with your accountant and an independent valuer closely to ensure your best interests are protected.

Can I challenge my spouse’s valuation of my business?

You can identify calculation errors or unclear assumptions and put proportionate written questions to the expert. Under the Family Procedure Rules 2010, unless the court directs otherwise, questions must be for clarification only, may be put once and must be sent within 10 days of the report being served.

When should I talk to a divorce lawyer?

As soon as possible. A family solicitor can identify the legal questions, while your accountant can organise valuation and look into matters such as cash flow and tax.

How can Purcell Solicitors help you?

We can help you decide whether a specialist valuation is needed and set out the questions it should answer. We will liaise with financial experts as required and do everything possible to achieve the results you want. Contact Purcell Solicitors to discuss your business interests and the records you should gather.

Please note that this article is for information purposes only and does not constitute legal advice.

Pauline Purcell is the Managing Director and founder of Purcell Solicitors, a specialist family law firm based in Milton Keynes. She qualified as a solicitor and built her early career at Fennemores, a top-100 legal firm in central Milton Keynes, where she became a partner and head of the family department before establishing Purcell Solicitors in 2005.

She has specialised exclusively in family law for over 30 years. Her qualifications span several disciplines: she is a solicitor, a trained mediator, a collaborative lawyer, and a family arbitrator, and she was among the first collaborative lawyers in England. She holds a law degree from the University of Buckingham, where she also lectured on the part-time undergraduate law programme.

Chambers and Partners has ranked Pauline as a Band 1 practitioner for Family/Matrimonial in the Thames Valley for several years. The 2025 Chambers and Partners Guide describes her as “incredibly astute and excels at getting to the heart of the issue,” “robust and frighteningly clever,” and “a rock and massive support” to clients throughout their cases. She is also listed as a Leading Lawyer by Wiselaw.

Her particular expertise lies in high-value financial cases, including those involving business assets, pensions, and complex or international elements. She is a long-standing member of Resolution and is committed to reaching negotiated agreements wherever possible, though she regularly represents clients in court and family arbitration when proceedings become necessary.

Pauline is regulated by the Solicitors Regulation Authority (SRA number: 258177). She can be contacted at pauline@purcellsolicitors.co.uk.