In a landmark ruling handed down today, the UK Supreme Court has clarified one of the most contested areas in financial remedy law: when can non matrimonial assets be shared after divorce?
The case of Standish v Standish concerned a wealthy couple whose marriage broke down in 2020. At the heart of the dispute was an £80 million transfer from husband to wife during the marriage. The wife claimed this gift had become matrimonial property and should be split equally under the “sharing principle.” The husband argued it was never meant to be shared, and had been transferred for tax planning purposes only.
Today, the UK’s highest court sided with the husband, and in doing so, set a new, definitive standard for how non-matrimonial property is treated in high-value divorces.
What was the dispute?
The husband, a retired investment banker, had amassed significant wealth long before his second marriage. In 2017, concerned about future inheritance tax liabilities, he transferred £77 million to his wife’s sole name. The couple discussed placing the funds into offshore trusts for their children, but the trusts were never set up. The money remained with the wife.
When they later divorced, the wife argued that by transferring those funds during the marriage, the husband had “matrimonialised” them – in other words, turned them into shared assets. The High Court agreed and awarded her £45 million. The Court of Appeal reversed that decision, and the wife appealed to the Supreme Court. We previously covered this Court of Appeal case last year.
What did the Supreme Court decide?
The key question was whether the £80 million had become matrimonial property subject to the sharing principle.
The Court answered no, and went further, affirming that:
“The sharing principle does not apply to non-matrimonial property.”
Unless an asset was acquired as part of the marital partnership, or unless both parties treated it as shared over time, it falls outside the sharing principle.
In this case, the husband’s transfer was part of a tax-saving scheme, intended to benefit their children, not the wife. There was no evidence that either party had treated the £80 million as part of the shared marital estate.
Why does this matter?
This marks a significant moment in the development of modern family law. Until now, the lower courts had left room for argument that non-matrimonial assets — such as inheritances or pre-marital wealth — might be shared in exceptional cases.
The Supreme Court has now drawn a clear line:
- Matrimonial property, earned or generated during the marriage, is subject to sharing.
- Non-matrimonial property, pre-marital wealth, gifts, or inheritance is not, unless the parties clearly treated it as shared over time.
This significantly narrows the scope for a spouse to claim against separate property in divorce proceedings.
What is “matrimonialisation”?
The concept of matrimonialisation — turning separate property into shared marital property — still exists, but the Court made clear it must be based on substance, not form.
The test is:
Did the parties treat the asset as shared over time, not just in title, but in intention and use?
A bare transfer of title, as in this case, is insufficient on its own. There must be clear evidence that both parties considered the asset part of the marital pot.
In Standish, the £80 million remained separate in substance and intention. No trust was ever set up, and the transfer was tax-driven, not an expression of shared intent.
What about fairness?
While the wife in Standish initially received £45 million, the Court of Appeal reduced her award to £25 million. This was based on a narrower definition of matrimonial property. The Supreme Court upheld that outcome.
However, the justices reaffirmed that the courts still retain tools under section 25 of the Matrimonial Causes Act 1973. Where one spouse has unmet financial needs, or has given up career opportunities, the court may make provision through the needs or compensation principles. But the sharing principle must be reserved for property generated through the joint efforts of the marriage.
Key takeaways
This decision reshapes the landscape for financial remedy cases, particularly where significant pre-marital or inherited wealth is involved. Here’s what separating spouses and their advisers need to know:
1. Matrimonial property is for sharing.
If it was built up during the marriage, it will usually be divided equally.
2. Non-matrimonial property is not automatically in the pot.
Assets brought into the marriage or acquired by gift or inheritance generally remain separate, unless clearly treated as shared over time.
3. Transfers between spouses do not automatically convert property.
A tax-motivated gift will remain separate in law unless there is a mutual intention to treat it as jointly owned.
4. Fairness and financial need remain central to the court’s discretion.
A financially weaker spouse may still have a claim, but not through the sharing principle alone.
This case may mark the end of any remaining ambiguity about what qualifies as matrimonial property in English law. Going forward, separating spouses should have a sharper understanding of what is (and isn’t) up for division. The line between joint and separate property is now clearer — and that clarity must inform both negotiation and expectation.
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