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Ask Clare Your Own Question
Clare
Clare, Solicitor
Category: Law
Satisfied Customers: 34137
Experience:  I have been a solicitor in High Street Practice since 1985 with a wide general experience.
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I own a care home as a sole trader which has been in my family

Customer Question

I own a care home as a sole trader which has been in my family since 1981 and was left to me 14 yrs ago. My husband of 11 years has left me, I have employed him on a salary at the care home since 2008 in the capacity of operations manager at an over inflated salary of £45,000. I employed a manager 2 years ago as I was unable to work with my husband. My husbands employment is safe however he is now asking for 50% of my care home as a settlement and tells me i need to turn into a limited company. I have offered to sell our marital home which will free £585,000 cash and give him £250,000 and continue in his current employment. When we met I owned a House with £175,000 equity. Would the care home business be taken into account for his settlement as it was mine before we met and has kept our family during our marriage? We have a 9yr old son and I have a 15yr old daughter from a previous marriage.
Submitted: 3 years ago.
Category: Law
Expert:  Clare replied 3 years ago.
Hi
Thank you for your question.
My name is Clare
I will do my best to help you but I need some further information first.
How much is the Care Home worth?
Clare
Customer: replied 3 years ago.

Hi,

The care home is roughly worth £900,000. my husband has never invested in it or made any financial contributions to it.

Pippa

Expert:  Clare replied 3 years ago.
Hi
How long have you lived together?
Clare
Customer: replied 3 years ago.

12yrs, married for 11 on the 9th august 2003.

Expert:  Clare replied 3 years ago.
Hi
Are there any loan secured against it?
What income do you have?
Clare
Customer: replied 3 years ago.

There is a £130k mortgage and a £25k loan at the care home and that is all. The annual profit is £114K I take around £55K after tax. The turnover is around £480k. The care home is my sole income.

pippa

Expert:  Clare replied 3 years ago.
Hi
Odd question - can you prove that he is overpaid for what he does?
Clare
Customer: replied 3 years ago.

I don't know that answer really though could probably employ someone do the same job for £25k! However I really would like to know now if an inherited business that occurred even before meeting him is likely to be added to the pot for our divorce?

Pippa

Expert:  Clare replied 3 years ago.
Hi
I am afraid that all assets owned by either or both of you form part of the matrimonial assets for consideration by the court - however that does NOT mean that he is entitled to 50% of the value of the care home.
The Court does deal with Inherited assets differently - especially where there are sufficient other assets to adequately meet the needs of the other spouse
Your problem is that your ex works in the business and will no doubt argue that he has contributed to its on going success and enhanced it's value so that it has become a full matrimonial asset to be divided 50/50
I do NOT think that the court will agree but I do think that you will have to sacrifice a larger share of the equity in the former matrimonial home.
I hope that this is of assistance - please ask if you need further details
Clare