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Readers’ forum: Should expenditure be divided in separate loan accounts?

08 July 2024
Issue: 4944 / Categories: Forum & Feedback , Business
Divorcing couple

I have recently been appointed to represent the wife in a divorce case.

She and her husband were 50-50 shareholders in a successful family company. For the many years they operated they funded most of their private expenditure through the company. The company’s accountant/tax adviser did a good job of identifying private expenditure and charging it to a loan account which was cleared each year via dividends. However he treated the loan account as a joint account and didn’t differentiate between private expenditure attributable to the husband and the wife. Everything was lumped together. As part of the divorce the wife has now requested me to re-analyse everything into two loan accounts – one for the husband and the other for herself. The work I have done to date shows that the husband’s expenditure was much higher than the wife’s and that if you treat the two...

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