Background

FRP Partner Fiona Hotston Moore was instructed as single joint expert in the family court to value a number of associated businesses held within one company, owned by a husband and wife. She was also asked for her opinion on the ability to extract a capital sum from the business, any future maintainable income, and the tax implications of potentially splitting the business assets between the parties.

Action

Fiona was instructed to value the company as a whole, and also to consider the value of the three distinct businesses operating within the company and how they might be separated. Our Forensic Services team undertook financial analysis of the historic accounting information, and researched the market sector and relevant market transactions. The review considered an apparent discrepancy in income recognition over a number of years, and the potential impact this had on the business valuation.

The main findings were provided in a court-compliant report. In a supplementary report Fiona also advised on the tax consequences of removing certain assets from the company and transferring these into the direct ownership of one party, so that both parties could run and own the part of the business they had previously managed and thus retain a future income stream.

Outcome

The expert report explained how Fiona and the team had valued the three strands of the business, the assumptions made, and all the findings. After the report was submitted, the parties were able to reach an agreement without the need to continue with the court proceedings.