How are farms valued for divorce?

Why Farms Are Complex Divorce Assets

Farms can constitute a significant portion of a couple’s assets. They are often inherited and passed down through generations, generating significant sentimental value as well as financial. Given the family ties attached to farms, they often also have complex ownership structures, with siblings or other family members having various competing interests. In many cases, farms are not just homes - they are businesses, livelihoods, and family legacies.

Because of their unique nature, farms require specialist valuation and careful legal handling during financial remedy proceedings.

What Affects a Farm’s Value in Divorce?

Farms are typically asset-rich but income-poor, meaning they may hold substantial value in land, buildings, and equipment, but generate modest income. Courts consider:

• Land ownership and acreage
• Farmhouse and outbuildings
• Livestock, machinery, and crops
• Tenancies, covenants, and agricultural ties
• Diversified income streams (e.g. holiday lets, farm shops, wind turbines)
• Inheritance or trust structures
• Tax implications, including Capital Gains Tax and Agricultural Property Relief

The valuation method may be:

• Net asset basis (common for asset-rich farms)
• Income basis (for profitable, diversified farms)

It is therefore crucial to obtain an accurate valuation, preferably from an expert who has particular experience in valuing farms. Similarly to other businesses, a farm may be valued on a net asset or income basis. For farms that are ‘asset rich’, owning land, machinery, buildings, and livestock, it may be more appropriate to value one on a net asset basis. The method chosen may have a substantial impact on the valuation, especially for farms which are asset rich but only have a modest stream of income.  

How the Courts Value Farms

The valuation process typically involves:

1. Full financial disclosure of all farm-related assets and liabilities
2. Appointment of a Single Joint Expert (SJE) — usually a chartered surveyor with agricultural expertise
3. Expert valuation report covering:
   • Land and property values
   • Business income and diversification
   • Ownership structures and third-party interests

The court may:

• Order the farm to be retained by one party with an offset in other assets
• Divide the farm or its proceeds
• Consider non-matrimonial elements (e.g. inherited land) under the needs and sharing principles

Matrimonial vs Non-Matrimonial Farms

Whether a farm is considered matrimonial property depends on:

• When it was acquired (before or during the marriage)
• How it was used (e.g. jointly operated or kept separate)
• Whether it was inherited or gifted

Even if a farm is inherited, it may still be included in the settlement if needed to meet the other party’s financial needs.

Frequently asked questions

What if the farm is jointly owned with family members?

The court will consider third-party interests. If siblings or parents have legal stakes, they may need to be joined to the proceedings. This can complicate the valuation and division process.

Can the farm be split or sold?

Yes, but courts often try to avoid breaking up working farms. Instead, one party may retain the farm and compensate the other through other assets or a lump sum.

At Vardags, we have extensive experience handling farming divorces and are uniquely positioned to assist clients with the complex legal and financial issues that agricultural assets present. If you are considering or going through a divorce and you or your spouse own a farm, contact Vardags today for a free initial consultation with one of our expert divorce solicitors. 

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