Working out finances with a business involved
Hi all, I’m a father of 2 going through a divorce currently living in the UK. Im in my 30s. My ex had an affair and although I tried to make it work she is very toxic and id be better off without her. Lots of heartache and therapy later here i am. I have a lot of respect for anyone going through or been through what i have.
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Anyway i have the decree nici and we are just discussing financials. It’s complicated as I run my own business as a LTD company director, but its just me. However annoyingly my Ex has 30% shares which we did for tax advantages originally. We are going through mediation with advice of lawyers. We have agreed so far to 50/50 with the kids.
I earn more than her around 60k or so, although i earns more last year as a one off…and she is on 30k…there aren’t really any other assets e.g. pensions etc to use...I would like some advice on the below in order of priority…
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1) HOW TO SPLIT FINANCES AND WORK OUT MAINTENANCE – We have been in a 3 bed nice house. We have sold this STC.
MY EX: £177k affordability to borrow + £90,000 deposit roughly. = £267,000 for new property.
ME: £221,600k affordability + £90,000 deposit roughly. = £311600 for new property.
*note deposit is what we would have split 50/50 from current house after all sale and purchasing costs removed.
* affordability is based on me giving her £800 maintenance per month - which i think is high for now, and will reduce later on
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Note: neither of us can afford a 2 bed house here, so we would have to accept a 2 bed flat, which in the area go for 250-280k for something ok. Because i can afford more, am i obliged to give her more out of the deposit to even it out? I have been advised if i do this i can add in a charge back clause as that would be an uneven split….or because her needs are being met by affording a flat is it fine that the affordability is uneven?
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EXAMPLE
MY EX: £177k mortgage + £130,500 deposit. = £304500
ME: £258k mortgage + £49500 deposit = £304500
(note EX gets £40,500 more than me here in deposit and will be a charge back at a later date.)
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Im not even sure if i can afford the numbers they say… its really difficult as self employed getting a mortgage right now…
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Or if i move into a property that she can afford, does it remove that need to pay her more. The difference doesn’t allow us to change the type of property we get so i dont see why i would need to. I don’t see why i should give her an uneven split also. With me giving her the maintenance our NET income is basically the same, which also feels ridiculous as i do a lot more work (she works 4 days a week)
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2) WORKING OUT OUTGOINGS - We are sharing items at the moment to ensure we have all the information we need before our next mediation session. One bone of contention causing us both hassle is our individual outgoings. I am basing the budget on a reasonable needs and ex is basing it on outgoings over the last few months. However I am very aware she has been overspending over the last few months including SPA days, trips to racing, buying house plants, expensive haircuts and multiple meals out at £80+. She wants to use last few months bank statements for this reason, and I want to base it on a forward thinking plan of what we can reasonably afford with net income moving forward. What is right, is there a template? she keeps saying ‘you cant tell me what to spend money on’ which is insane as its 66%+ my income she’s spending. She couldn’t afford that on hers alone.
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3) RE: BUSINESS VALUE TO HER – A business is worth what someone is willing to pay for it. Take me out of the business and it is worthless. It doesn't have any contracts, employees, no assets, no stock, no IP or ownership. I treat it like a freelancer, its marketing...do project work get paid and then spend the money. When someone evaluates this they will come to the same conclusion. I have been advised this could take 3+ months and cost £4k+ from my solicitor and research to get a proper valuation. It's a lifestyle business that has always been set up this way. I suggest we simply divide the available money, which is around 15k. I have provided a balance sheet letter from my accountant to her. Again should we waste time with a valuation? any other advice?
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Many thanks in advance 🙂
4 comments posted: Friday, May 20th, 2022
