August 2024

Divorce and your business: Steps to protect your assets

Posted on 12 August 202422 March 2025 by Sarah O'Sullivan

Getting divorced is almost always a stressful experience. – Relationships end, arguments ensue, assets get divided up, and there can be the welfare of children to think about. Now add to that the thought that your livelihood is threatened too. This is the situation business owners can face when they consider divorce.

Will their ex-partner get half the business? Will the business have to be sold? What if you both work in the business? Will we all lose our livelihoods? What will be left as an inheritance for my children?

These are the kind of stressful questions we are here to answer – and help resolve for you.

Caroline Andrews, Senior Associate in the Tees Family law team, considers the challenges and sets out what can be done. As a business owner planning to divorce, you have options. It’s vital that you get specialist legal advice to make sure you choose the right route to go down.

How are assets divided in divorce?

In a divorce, the first challenge is establishing each party’s needs and how they can be met. Consideration is also given to the principle of sharing and dividing assets in an objectively fair way—but that does not necessarily mean equal.

The courts have a very wide discretion to reallocate assets within a marriage. If one of you owns a business, that business’s assets (or liabilities) will be considered when assessing the ‘pot’ that will be distributed between you.

The Impact of Divorce on Different Business Structures

The impact of divorce on a business can vary depending on its structure.

Limited companies vs. sole traders: If you are a sole trader, your business assets and liabilities are considered personal assets and may be subject to division during a divorce. This means that your spouse could potentially claim a share of your business. On the other hand, limited companies are separate legal entities, and your spouse is less likely to have a claim on the business itself. However, they may still be entitled to a share of any dividends or salary you receive from the company. So, is a limited company protected from divorce? The answer can be complex and depends on various factors. Tees specialist solicitors understand the complexities of business structures and can help protect your interests during a divorce.

Partnerships and family-owned businesses: Divorce can have significant implications for partnerships and family-owned businesses. In a partnership, your spouse may become entitled to a share of the business unless a prenuptial or postnuptial agreement specifically addresses the business. Family-owned businesses can also face challenges, as the division of assets may require valuing the business and negotiating how to divide its value.

In general, the court will try not to order the sale of a business if one of the parties is against this. Instead, the outcome is more likely to be that the business is retained by offsetting against other resources or there is a series of ongoing payments funded by the business profits. This arrangement tends to work well when one person is only interested in the business for the money it generates, not for the business itself. This has the benefit of keeping the business going for the future.

Call our specialist solicitors on 0808 231 1320

Divorce and business valuation

Valuing the business is often the first step which gives vital clarity. A valuation can also report on business debts and liabilities, as well as cash flow and liquidity. Take care to consult a legal team that has access to business legal expertise, as well as family law expertise.

It will of course help if you have kept accurate financial records and have avoided mixing business and family funds together, to understand the valuation of the business and how it operates. There are occasions of course where business and family funds are mixed – which potentially makes the task harder, but not impossible.

It’s important you don’t attempt to move money out of the business if you think you might be headed for divorce. The courts require full financial disclosure as they strive towards a fair resolution and if you’re caught having done this, it will not do you any good in the eyes of the court.

The valuation process should identify:

the business structure – a partnership, limited liability partnership or company, or are you a sole trader?
whether it’s possible to take funds out of the business without damaging its future prospects
information about the shareholdings arrangements: who has shares, to what value and what are the relative percentage shares that people own, and are they family members?
the tax liabilities – both for individuals and the tax that the business itself owes
Is there a parent company, with additional companies with value (or debts and liabilities) to consider?

The history of the business

It’s important to gather evidence to establish how and when the business began and who has contributed what to its development. This is because the respective roles of both parties in the development of the business over time will impact the negotiations when it comes to deciding who gets what.

When did it start trading? Has it been in the wider family for many years? Or was it built up by one or both of you during the marriage, or started by one of you before you married?

The people running the business

You need to establish the facts around the running of the business. This is also important if you don’t plan to sell the business, but it will provide income going forwards to the person who doesn’t keep the business. You need to clarify:

who is pivotal to the running of the business? Who are the other key players?
are any of them family members?
does the business employ your partner? This can be tempting for tax reasons, but it could allow them to claim a bigger share, claiming they have contributed more than they may have actually done
are there adult children involved in the business?
does anyone in the family live on the business premises?
is the business run from the family home?

The vision for the business

If the business has significant value and the plan is not to sell it, the two parties to the divorce may need to discuss whether there are sufficient other assets in the marriage (such as property or investments) to ‘offset’ the value of the business by giving one party more non-business assets to allow the other party to continue the business.

It might be intended that the business is sold at some point in the future, for example at the point of retirement, in which case a balance in a settlement could be finalised at a future date.

Succession planning

If you put in place clear plans for your children to inherit the business and be involved in its running, this can help sway the court that selling it to release funds, is not in the adult children’s interests.

Farming businesses

When the business is a farming business, things can be even more intertwined because the family home is often standing on the land and farming is an all-encompassing way of life. At Tees, our heritage and culture has been rooted in the local farming community in the East of England for well over one hundred years. Find out how we can help you protect your farming business from divorce.

Is going to court inevitable?

No. Going to court is the last resort and should be avoided where possible by engaging in non-court dispute resolution wherever possible. The courts are placing more and more emphasis on non-court dispute resolution as a means of solving disputes because of the significant delays and expense that come with court proceedings.

You should therefore first consider mediation, collaboration and arbitration as alternatives to court proceedings, to try and get matters resolved as efficiently, cost-effectively and amicably as possible.

Protect your business in advance

By taking professional advice and taking time to plan, you can put in place measures to create a structured settlement to protect the business. If you are thinking ahead you should consider a prenuptial agreement (or post-nuptial agreement if already married) as this is another effective legal device for protecting assets, such as businesses, for the long-term

Tees advises on sale of GTES Holdings to STS Aviation Group

Posted on 6 August 202429 March 2025 by Sarah O'Sullivan

Tees has advised long-standing client Greg Macleod on the sale of GTES Holdings Limited to STS Aviation Services, part of the STS Aviation Group.

GTES Holdings Limited is the holding company of GT Engine Services Limited (GTES), a jet engine care business based at Stansted Airport. GTES offers a wealth of aircraft maintenance, repair and overhaul (MRO) services and is one of the world’s leading aircraft repair and engine maintenance companies. GTES works with some of the biggest names in global aviation and seeks to provide engine management services in accordance with current Civil Aviation Authority (CAA), European Union Aviation Safety Agency (EASA) and Federal Aviation Administration (FAA) quality standards.

STS Aviation Services (STS), part of the STS Aviation Group, provides aircraft MRO services globally. STS is now the largest independent MRO in the United Kingdom and has an expanding footprint in Europe. The acquisition of GTES by STS builds on its strategy of being a single point solution for MRO services and further promotes STS’ growth ambitions.

Greg Macleod, former CEO of GTES, said: “The team at Tees worked tirelessly to put this deal together, offering valuable advice and support, their communication was top class even when we were faced with dealing with parties across several time-zones. I am delighted with the result and would thoroughly recommend their services.”

Corporate Partners Lucy Folley and Baljeet Kaur led the transaction on behalf of Tees, overseeing a diverse team of experts who provided comprehensive support. The team included professionals from Tees commercial property team, led by Partner Daniel Fairs, who advised on the real estate elements for the various units occupied at Stansted Airport.

Lucy Folley said: “Working alongside Greg for many years, we have seen GT Engine Services achieve considerable growth. When Greg decided it was the right time to realise the value of his many years’ hard work and sell his shares in GT Engine Services, we were delighted to assist him. It was a pleasure to guide Greg through the legal process involved and we wish him and the STS team every success in the future.”

Mr Macleod will remain a key member of the senior leadership team at GTES in the role of Managing Director, Engine Services.

Tees worked closely with Rob Dukelow-Smith and Amie Goodlad of Forward Corporate Finance, who advised on the tax and financial components and assisted in constructing the deal. Peters Elworthy & Moore (PEM) advised on the tax and accounting aspects

Unexpected economic boost: UK growth outpaces forecasts

Posted on 6 August 202428 March 2025 by Sophie Soraf

Economic Review July 2024

Figures released last month by the Office for National Statistics (ONS) showed the UK economy grew faster in May than had been predicted, while survey evidence points to a more recent post-election pick-up in business activity.

The latest gross domestic product (GDP) statistics revealed that economic output rose by 0.4% in May, twice the level forecast in a Reuters poll of economists. May’s figure also represented a strong rebound from the zero-growth rate recorded in April, with a broad-based increase in output as the services, manufacturing, and construction sectors all posted positive rates of growth.

ONS also noted that growth was relatively strong in the three months to May, with GDP rising by 0.9% in comparison to the previous three-month period. This represents the UK economy’s fastest growth rate for more than two years.

Evidence from a closely watched economic survey also suggests private sector output picked up last month following a lull in the run-up to July’s General Election. The preliminary headline growth indicator from the latest S&P Global/CIPS UK Purchasing Managers’ Index (PMI) stood at 52.7 in July, slightly ahead of analysts’ expectations and up from a six-month low of 52.3 in June. Manufacturing output was particularly strong, with this sector expanding at its fastest rate in almost two and a half years.

Commenting on the findings, S&P Global Market Intelligence’s Chief Business Economist Chris Williamson said, “The flash PMI survey data for July signal an encouraging start to the second half of the year, with output, order books and employment all growing at faster rates amid rebounding business confidence. The first post-election business survey paints a welcoming picture for the new government, with companies operating across manufacturing and services having gained optimism about the future and reporting a renewed surge in demand.”

Fresh signs of cooling jobs market

Last month’s release of labour market statistics revealed further signs of a softening in the UK jobs market with pay growth easing and another drop in the overall number of vacancies.

Recently released ONS figures showed that average weekly earnings, excluding bonuses, rose at an annual rate of 5.7% in the three months to May. Although this was in line with analysts’ expectations, it did represent a modest decline from the 6.0% recorded during the previous three-month period and was the slowest reported rate of pay growth since the summer of 2022.

ONS said the latest release suggested pay growth is now showing ‘signs of slowing again’ although it also pointed out that, in real terms, wage growth still stands at a two-and-a-half-year high. Indeed, after adjusting for inflation using the Consumer Prices Index including owner occupiers’ housing costs, regular pay rose by 2.5% in the three months to May.

The data also revealed a further fall in the number of job vacancies, with 30,000 fewer reported in the April–June period compared to the previous three months. While at 889,000, the total is still significantly higher than pre-pandemic levels, this latest fall was the 24th successive monthly decline in the overall level of vacancies.

ONS highlighted other signs of ‘cooling’ in the labour market as well, with growth in the number of employees on the payroll said to be ‘weakening over the medium term.’ Additionally, while the latest release did show the unemployment rate unchanged at 4.4%, ONS noted that the rate has been ‘gradually increasing.’

The statistics agency also provided an update on its plans to improve reliability of the labour market data. A switch to a new version of its Labour Force Survey, which had been due to take place in September, has now been delayed until next year.

Markets (Data compiled by TOMD)

On the last day of July, US equities were supported as investors contemplated the latest move from the Federal Reserve to retain rates, with indicators from Fed Chair Jerome Powell that a September cut “could be on the table.”

The tech-oriented NASDAQ responded positively after a challenging few days as initial earnings from some tech mega caps disappointed. The NASDAQ closed July down 0.75% on 17,599.40, while the Dow Jones closed the month up 4.41% on 40,842.79.

The UK’s blue-chip FTSE 100 had a boost on 31 July, with a series of strong headline earnings supporting, while traders await the Bank of England’s next interest rate decision. The index closed the month on 8,367.98, a gain of 2.50% during July, while the FTSE 250 closed the month 6.48% higher on 21,600.71. The FTSE AIM closed on 787.02, a gain of 2.96% in the month. The Euro Stoxx 50 closed July on 4,872.94, down 0.43%. The Japanese Nikkei 225 closed the month on 39,101.82, a monthly loss of 1.22%.

On the foreign exchanges, the euro closed the month at €1.18 against sterling. The US dollar closed at $1.28 against sterling and at $1.08 against the euro.

Brent crude closed July trading at $80.91 a barrel, a loss over the month of 4.56%. With Middle East conflicts escalating, crude prices were impacted as markets closely watch geopolitical developments. Gold closed the month trading at $2,426.30 a troy ounce, a monthly gain of 4.09%.

Index	Value (31/07/24)	Movement since 28/06/24
FTSE 100	8,367.98	+2.50%
FTSE 250	21,600.71	+6.48%
FTSE AIM	787.02	+2.96%
Euro Stoxx 50	4,872.94	-0.43%
NASDAQ Composite	17,599.40	-0.75%
Dow Jones	40,842.79	+4.41%
Nikkei 225	39,101.82	-1.22%

Headline inflation rate holds steady

Consumer price statistics published last month by ONS showed that the UK headline rate of inflation was unchanged in June defying analysts’ expectations of a slight fall.

According to the latest inflation figures, the Consumer Prices Index (CPI) 12-month rate – which compares prices in the current month with the same period a year earlier – remained at 2.0% in June. This was marginally above the 1.9% consensus forecast taken from a Reuters poll of economists.

The largest downward pressure on June’s CPI rate came from the clothing and footwear sector, which ONS said was due to a higher level of discounting in this year’s summer sales compared to 2023. Hotel prices, however, rose by a significantly greater extent this June than last year, while a comparatively smaller fall in the costs of second-hand cars also put upward pressure on the headline rate.

Just prior to release of June’s data, the International Monetary Fund (IMF) warned that the UK was among a number of countries witnessing some ‘persistence’ in inflation, particularly in relation to services inflation. The IMF added that this was ‘complicating monetary policy normalisation’ with the ‘upside risks to inflation’ raising the prospects of interest rates staying ‘higher for even longer.’

Cooler weather hits retail sector

The latest official retail sales statistics revealed declining sales volumes after unseasonably cool weather deterred shoppers. At the same time, more recent survey data suggests the retail environment remains challenging.

ONS figures released last month showed that total retail sales volumes fell by 1.2% in June, following strong growth during May. ONS said June saw a decline across most sectors, particularly those sensitive to weather changes such as department stores and clothes shops. Retailers blamed poor weather and low footfall, as well as election uncertainty, for dampening sales.

Evidence from the latest CBI Distributive Trades Survey shows trading conditions have remained difficult, with its headline measure of sales volumes in the year to July dropping to -43% from -24% the previous month. The CBI described July as a ‘disappointing’ month for retailers, blaming a combination of ‘unfavourable weather conditions’ and ‘ongoing market uncertainty.’

The survey also found that the retail sector expects the weak outlook to continue this month, although August’s fall in sales volumes is forecast to be slower (-32%). The CBI also noted some glimmers of optimism, with several retailers expressing hopes for ‘an improvement in market conditions post-general election.’

All details are correct at the time of writing (1 August 2024)

It is important to take professional advice before making any decision relating to your personal finances. Information within this document is based on our current understanding and can be subject to change without notice, and the accuracy and completeness of the information cannot be guaranteed. It does not provide individually tailored investment advice and is for guidance only. Some rules may vary in different parts of the UK. We cannot assume legal liability for any errors or omissions it might contain. Levels and bases of relief from taxation are currently applied or proposed and are subject to change; their value depends on the investor’s individual circumstances. No part of this document may be reproduced without prior permission.

This material is intended for information purposes only and is not intended as an offer or solicitation for the purchase or sale of any financial instrument. Tees is a trading name of Tees Financial Limited, which is regulated and authorised by the Financial Conduct Authority. Registered number 211314.

Tees Financial Limited is registered in England and Wales. Registered number 4342506.

Grandparents’ rights to see grandchildren

Posted on 1 August 202422 March 2025 by Sarah O'Sullivan

One of the common misconceptions surrounding family law is that grandparents have an inherent or automatic right to see or spend time with their grandchildren – in other words, have grandparents’ rights. There is nothing enshrined in law to grant grandparents automatic rights based on their biological connection alone. However, the happy fact is that a court would rarely deny grandparents access to their grandchildren unless there is a specific reason to do so.

Here, we outline the different legal avenues open to grandparents to get access to their grandchildren:

Child Arrangements Order to spend time with your grandchildren

If, for any reason, a person with parental responsibility were to object to or try to prevent you from seeing your grandchild, and you cannot reach an agreement with them, you will need to apply to the court for a court order.

Because there is no automatic legal right to contact grandparents, the Child Arrangements Order would be the document that enshrines your legal rights and responsibilities as a grandparent. The court application is a two-step process:

apply for permission to apply for a Child Arrangements Order
apply for a Child Arrangements Order.

What is a Child Arrangements Order?

A Child Arrangements Order (CAO) is an order regulating arrangements relating to either of the following:

with whom a child is to live, spend time or otherwise have contact, and
when a child is to live, spend time or otherwise have contact with any person.

Getting permission to apply for a Child Arrangements Order

The court will consider a number of factors before granting you permission to apply for a CAO, as follows:

your history of contact with your grandchild
what you are seeking by way of contact – times, locations, etc and
whether what you are seeking would be beneficial for your grandchild.

Applying for a Child Arrangements Order

The court recognises the value and importance of a child spending time with their grandparents. The court has to balance this with the wishes of the children and the wishes of the parents (which are not necessarily the same), and each case has its own unique facts. These situations can be fraught with difficulty and should be carefully navigated. A skilled family lawyer may be able to guide you to mediation services to help prevent hostilities from escalating and the involvement of the courts.

The court has several principles that it considers before making a CAO. However, the paramount consideration is always the welfare of the child. For example, the court will consider:

the existing arrangements that you have in place and that the parents have in place
whether the arrangements you seek would take away time from the parents in such a way that it would not be in the child’s best interests.

What is the ‘no order’ principle?

Another key principle is the ‘no order’ principle, whereby the court will not make an order if they do not think the order would further the welfare of that child.

An example of where a CAO might not be given (or perhaps not in the terms requested) would be where there was a history or allegations of domestic abuse surrounding the grandparent. If there were allegations of this nature, the court would determine on a balance of probabilities whether these allegations were true at a fact-finding hearing and then consider whether they should make a CAO and on what terms. Even in such circumstances, the court may still determine that the children can spend time with their grandparents, but only in such a way as to protect that child’s welfare (perhaps through contact taking place remotely or being supervised).

It would only be in extreme circumstances where the court would determine that no contact should be allowed with a grandparent.

What if a parent objects to a grandparent seeing their grandchild?

If a parent objects, they may raise their reasons with the court. The court will then consider what information they require to decide on the best arrangements for the child.

What if I have a Child Arrangements Order in place, but the parents are preventing me from seeing my grandchildren?

This is an upsetting and frustrating situation that, unfortunately, many people find themselves in. The court will consider why this has happened and what can be done to facilitate the arrangements without difficulty in the future.

The court has in place several mechanisms which it can apply to the parent to enforce your CAO, including:

parenting courses
compensation to be paid (e.g. you had travel tickets that were not used because contact was prevented)
compulsory unpaid work (otherwise known as community service)
a fine
imprisonment – this is an extreme enforcement mechanism, and one the court is unlikely to use, as it would result in depriving the children of their parents. However, if they continue to breach a CAO (which by its nature is in place because it supports the wellbeing of that child), then they risk harming their children’s welfare. Therefore, repeated breaches without reasonable excuse might sometimes result in imprisonment.

In the first instance, the court will look at trying to resolve the issues rather than move to enforcement.

Special guardianship order

This is usually intended for situations when the children cannot live with their birth parents and require secure accommodation. Often the court will look to blood relatives in such a situation and this includes grandparents. A Special Guardianship Order confers parental responsibility for the child subject to the application to the applicant, for example to the grandparent.

The SGO, therefore, allows the special guardian to make day-to-day arrangements for the child and decisions about the child’s upbringing, such as schooling.

To apply for a Special Guardianship Order, as a grandparent, you need to have one of the following:

have in place a CAO
have lived with the child for 3 out of the last 5 years, or because you are a relative of the child, have had the child live with you for the year immediately before application
have consent of the local authority (if the child is in care)
have consent of those with parental responsibility (usually the birth parents but also anyone else with a CAO)
have permission of the court.

Unlike adoption (see below), a Special Guardianship Order does not cut the legal tie of automatic parental responsibility between a child and their birth parents. However, the parental responsibility of the special guardian can be exercised to the exclusion of others with parental responsibility, effectively overriding the parental responsibility of the birth parents. However, there are limits to an SGO which are:

you cannot change the child’s surname or
remove them from the jurisdiction (of England and Wales) for three months or more without the consent of all those with parental responsibility.

Adoption of grandchildren by grandparents

Adoption is a draconian but sometimes necessary measure that will completely sever the legal link between a child and their parents. If the child is not in care and both of their parents are alive, an adoption order will rarely be appropriate. However, it can happen, and an example of where adoption by a grandparent might be appropriate would be where a single mother decides that she does not want to raise her child.

Parents can consent to their child being adopted or generally placed for adoption. The child will need to be six weeks old or older for parents to give such consent. If a child is placed into adoption, the courts will prefer adoption by a blood relative over a stranger.

However, every situation is different, and the starting point is taking specialist legal advice. At Tees, we are here to help you navigate your options and decide which avenue is right for you.