In this article, Paul Wild and Alexandra Hawkes consider the Judgement made today at the Supreme Court.
The Supreme Court has, this morning, delivered its judgment in Standish v Standish, a case that has attracted significant attention among family lawyers and high-net-worth individuals alike. At its heart was a long-standing question in financial remedy law: when does non-matrimonial property lose its separate character and become subject to the sharing principle?
The Supreme Court has unanimously dismissed the wife’s appeal, confirming that the assets transferred to her by the husband in 2017 retained their non-matrimonial character. Although the Court’s reasoning diverged in places from that of the Court of Appeal, the outcome remains the same: the wife is not entitled to share in the 75% of assets deemed non-matrimonial, and her award remains at £25 million.
The Issue
Under the Matrimonial Causes Act 1973, the court has discretion to divide assets on divorce, guided by principles developed through case law. Where needs are met and no claim for compensation arises, the court applies the sharing principle – which holds that matrimonial property should generally be shared equally.
However, the law draws a distinction between matrimonial property (assets acquired during the marriage through joint endeavour) and non-matrimonial property (such as pre-marital, inherited, or gifted wealth). While non-matrimonial property can sometimes be excluded from sharing, there is no bright-line rule. Instead, the court looks at how the asset was treated during the marriage, whether it was mingled with other property, and how it was used.
The Facts of the Case
Mr and Mrs Standish were an extremely wealthy couple. In 2017, Mr Standish transferred £77.8 million in investments to his wife as part of a tax planning arrangement. These assets were originally his and he argued these to be non-matrimonial property.
At trial, the judge held that the transferred assets had become matrimonial and divided the matrimonial pot 60/40 in the husband’s favour, recognising his unmatched financial contribution. Mrs Standish received assets worth £45 million, with the remainder returning to the husband.
The Court of Appeal disagreed, holding that at least 75% of the transferred assets retained their non-matrimonial character. It therefore reduced the wife’s award to £25 million.
The wife appealed. The key question before the Supreme Court was whether the transfer of assets to the wife – during the marriage, and for tax reasons – changed the nature of those assets, in effect were they “matrimonialised”.
The Supreme Court’s Decision
Giving the leading judgment, Lord Burrows reaffirmed the three key principles applied by courts when dividing assets on divorce:
- Needs – These should, if possible, be met;
- Compensation – May apply where one party has given up valuable earning potential;
- Sharing – Matrimonial assets should generally be shared equally.
While the courts retain wide discretion to achieve fair outcomes, this decision offers a firm statement on how the sharing principle is to be applied – essentially, not to non-matrimonial assets.
What Counts as Matrimonial Property?
The Court examined the distinction between matrimonial and non-matrimonial property. Matrimonial property typically arises from the “fruits of the marriage partnership” – in other words, assets acquired through joint endeavour during the marriage. Non-matrimonial property is usually sourced externally – such as pre-marital wealth, gifts, or inheritances.
In a significant development, the Supreme Court has now explicitly confirmed that non-matrimonial property is not subject to the sharing principle, though it may still be considered where needs or compensation principles arise.
However, non-matrimonial property can become matrimonial over time through a process the Court called “matrimonialisation.” This occurs not mainly through the source of the asset, but rather with the focus on how the parties have treated it – for example, if the asset is regularly used for family purposes or treated as part of the shared marital wealth.
Applying the Law to the Standish Case
In Standish, the husband transferred ‘the 2017 assets’ to the wife, during the marriage, for the purpose of a tax-efficient trust structure. At the time of divorce, the trust had not been set up, and the assets remained in the wife’s name.
The wife argued that this transfer amounted to a gift, and that the assets had become matrimonial. The Court disagreed, finding that the 2017 assets:
- Had been transferred solely for inheritance tax planning;
- Were intended to benefit the couple’s children, not the wife;
- Were never treated by either party as shared wealth.
As a result, 75% of the 2017 assets retained their non-matrimonial character, and the Supreme Court upheld the decision of the Court of Appeal, agreeing that it was correct to exclude these assets from the sharing principle.
What This Means Going Forward
The Supreme Court’s decision in Standish v Standish now stands as the leading authority on when, if ever, non-matrimonial property becomes subject to the sharing principle in divorce. While the court retains a wide discretion, this judgment provides long-awaited clarity for individuals seeking to protect wealth acquired before or outside the marriage.
Key takeaways include:
- Non-matrimonial property is not subject to the sharing principle unless it has been treated by both parties as part of the shared marital wealth;
- The source of the asset remains important, but courts will also look at how the asset has been used and treated over time;
- Inter-spousal transfers, even during the marriage, will not automatically convert non-matrimonial assets into matrimonial ones – especially where the purpose is tax planning or where the benefit is intended for the parties’ children.
For our clients, particularly those with significant pre-marital, inherited or business assets, this decision provides reassurance that such property can be preserved, provided it is not mingled or treated as family property. For those considering how to structure their finances during marriage or separation, the ruling underscores the importance of clear intentions and consistent treatment of assets.
This case also serves as a timely reminder of the value of pre-nuptial or post-nuptial agreements, especially where one or both spouses are bringing substantial non-matrimonial assets into the relationship. These agreements can help set clear expectations and reduce uncertainty if the relationship later breaks down.
If you have questions about how this judgment may affect your financial position or wish to protect your assets, our experienced family law team can help, please contact us.
