Business valuation after separation: a guide for NZ business owners

Valuation issues specific to relationship propertySeparation is stressful. If you or your partner own a business, there is the added complexity of working out what it is worth, and how much of that value is relationship property. A business valuation after separation is often one of the largest single issues in a property settlement.

Look after your wellbeing first. Then be honest with yourself about how involved you were in the relationship finances.

If you were a passive participant, think about whether the financial information you can access now will still be available when you are ready to deal with it. Financial statements, bank statements, tax returns and accounting system access can become harder to obtain once a separation turns difficult. Where you can lawfully keep copies, it is worth doing so early, and your solicitor can advise you on what you are entitled to.

What information is needed for a business valuation after separation?

A valuation is only as good as the information behind it. Where both parties jointly instruct a valuer, information is usually shared freely, as most people want to reach a settlement and move on. That isn't always the case, and gaps in information take time and cost to resolve.

When we value a business or company, we typically look at:

• financial statements and management accounts, usually for at least three years;

• remuneration paid to each partner and to other family members, and whether it reflects market rates;

• rent paid, particularly where the business occupies premises owned by one or both partners;

• one-off or unusual transactions, and any cycles or seasonality in the business;

• shareholder current accounts and loans to or from the company;

• investments, property or plant, especially high-value assets not essential to day-to-day trading;

• the business's competitors, its industry and the wider economy; and

• anything unique to the business, including how dependent it is on one or both partners.

Valuation issues specific to relationship property

Valuing a business in a relationship property context raises issues that don't arise in an ordinary sale.

The valuation date. Under the Property (Relationships) Act 1976, property is generally valued at the date of the hearing, not the date of separation, although the court can decide otherwise (s 2G). If the business has grown or declined since separation, this can make a material difference.

Personal versus business goodwill. Some of a business's value may depend on the personal skills, relationships or reputation of the owner rather than on the business itself. How that value is treated is often contested, and it needs to be identified clearly in the valuation.

Normalising the earnings. Owner-operated businesses often pay partners, family members or related-party landlords above or below market rates. We adjust for these so the valuation reflects what the business would earn under arm's-length arrangements.

Independence. A valuation may be relied on by both parties, their solicitors and potentially the Family Court. Whether we are jointly instructed or engaged by one party, our role is to give an independent, supportable opinion of value.

When separate property becomes relationship property

Not everything owned by a couple is relationship property. A business one partner owned before the relationship, or inherited, may be separate property. That classification is not always the end of the matter.

Under s 9A of the Act, an increase in the value of separate property can become relationship property where it is attributable to the use of relationship property, or to the actions of the other partner. Those actions can be direct, such as working in the business, or indirect, such as supporting the household so the owner could focus on the business. Separate property can also lose its separate status where it is used to acquire or improve relationship property, or becomes intermingled with it (s 10).

These are legal questions, but they depend heavily on financial evidence. That is where an accountant and valuer can help.

Contracting out agreements

Some couples have signed a contracting out agreement (sometimes called a prenup) setting out how their property will be treated. Where there is one, our role is often less about valuing the business and more about investigating how money and effort have moved through it.

This work draws on our accounting skills as much as our valuation skills. We work with you and your solicitor to agree an investigative path, then trace the transactions that matter. Whether the agreement still applies as written, and what it means for your settlement, are questions for your solicitor.

How we work with your solicitor

Our role is to give your solicitor the financial evidence they need. When separate property is in question, we are likely to ask about:

• where funds introduced to the company came from;

• where drawings from the company were paid to; and

• what each partner contributed to the business, and whether they were paid a market wage for it.

We then analyse the records and discuss our observations and conclusions with your solicitor. Your solicitor forms the legal view on whether separate property, or an increase in its value, has become relationship property.

Need help?

If you need help understanding your rights, get legal advice as soon as possible. If you or your solicitor need a business valuation after separation, or help investigating how separate property has been used, talk to us about our business valuation services or book a 30-minute appointment.

This article is general information only and is not legal advice.

First published 7 January 2022. Updated 9 November 2026