New Company formation

[dx4100]

I don't think it is. If you were sole director and shareholder, then the company funds are not 50:50 in a divorce. It may have bearing on child maintenance if you have kids but in terms of divvying up your financial assets, I don't think they count it. Double check with a solicitor but based on cases I've dealt with, I've not seen a solely owned company being included as part of the settlement.

In some ways thats even more of a reason in my view to add my wife to the company. She deserves to profit from our joint ventures in life - as I do from hers. She has earn't more than me in past before becoming a teacher so I can hardly complain as I benefited then.

If that life needs a reset at some point then its only fair its reset on a 50/50 basis. I wouldn't want to deny her access to half.

[Craig@Clarity]

In some ways thats even more of a reason in my view to add my wife to the company. She deserves to profit from our joint ventures in life - as I do from hers. She has earn't more than me in past before becoming a teacher so I can hardly complain as I benefited then.

If that life needs a reset at some point then its only fair its reset on a 50/50 basis. I wouldn't want to deny her access to half.

Hey, I'm not saying don't do it. I have new clients asking all the time if they should add their spouse. First question I always ask is nothing personal but do you trust them. Then we discuss what ratio best works from a strategic tax planning point of view. If it's all good in the hood, go 50:50 but if I don't raise the question, mostly the issue is never thought about. I've had cases where things haven't worked out but the client has gone in it with their eyes wide open.

[northernladuk]

Asset yes but I've not seen it included as part of a financial settlement. If you're looking at it as a one-man band, I can see your point but I don't think the courts would paint all cases with that same brush.

What if the shareholder was working in partnership with one/two/three other shareholders which didn't include the spouse? That "asset" cannot be valued as it is a mechanism for receiving dividends and possibly capital upon winding up. If the directors don't declare any dividends or have no intention of winding up, what is that "asset" worth in a settlement? You can't put an agreed value on it.

Imagine what it means if you hold shares in British Gas and you get divorced. Would you have to include a percentage of British Gas's valuation as part of the assessment?! That would be mental IMO.

I'm still not convinced. We've had threads on here about divorce and here are two examples of posters that have been through it and the company was considered

https://forums.contractoruk.com/acco...ml#post2381350
https://forums.contractoruk.com/acco...ml#post2496597

I searched google for 'can a ltd company be counted as an asset in a divorce' and every single article confirms it's an asset he owns so can be considered. Lots of caveats but the simple answer is yes it's included but you can do various stuff to mitigate.

He owns the company outright, 100% of the shares so surely it's just another asset that's going to go in. The quip about British Gas has no bearing really but his shares would be considered so naturally the income from them would. Having shares in a large multinational and him owning the company are two completely different things.

[dx4100]

Hey, I'm not saying don't do it. I have new clients asking all the time if they should add their spouse. First question I always ask is nothing personal but do you trust them. Then we discuss what ratio best works from a strategic tax planning point of view. If it's all good in the hood, go 50:50 but if I don't raise the question, mostly the issue is never thought about. I've had cases where things haven't worked out but the client has gone in it with their eyes wide open.

Cheers, I know your intentions are good. Thanks for the pointers.

[dx4100]

I'm still not convinced. We've had threads on here about divorce and here are two examples of posters that have been through it and the company was considered

https://forums.contractoruk.com/acco...ml#post2381350
https://forums.contractoruk.com/acco...ml#post2496597

I searched google for 'can a ltd company be counted as an asset in a divorce' and every single article confirms it's an asset he owns so can be considered. Lots of caveats but the simple answer is yes it's included but you can do various stuff to mitigate.

He owns the company outright, 100% of the shares so surely it's just another asset that's going to go in. The quip about British Gas has no bearing really but his shares would be considered so naturally the income from them would. Having shares in a large multinational and him owning the company are two completely different things.

I have seen this play out.

I have two friends who sadly divorced. He owned a pretty big company worth a lot. Whichever way you cut it he couldn't of gone and built that company if it wasn't for her looking after the kids and sacrificing her own pursuits along the way. Thats the decisions they took as a family / couple. Feels entirely unreasonable if the the wife couldn't stake a claim in these sort of situations.

Thankfully my friends settled it all out of court - she got an house and other assets and he kept the business and so on. He "won" overall but both sides happy. Handled it like grown ups thankfully. Would have been unrealistic to break up the company but I guess she could have asked for shares.