On 2 July 2025, the Supreme Court of the United Kingdom handed down their landmark judgment in the case of Standish v Standish [2025] UKSC 26 which refines the boundaries of the sharing principle and reinforces the conceptual integrity of non-matrimonial property within financial remedy proceedings. The decision has significant implications for the treatment of wealth acquired outside of a marriage and its subsequent transfer between spouses.
Background
Prior to the relationship, the Husband accumulated significant wealth through his employment which resulted in substantial assets including a farm and farming business in Australia and investment funds. The parties began their relationship in 2003, residing in Switzerland together from 2004 to 2008 when they moved back to Australia and subsequently to England in 2010. The marriage broke down in 2020.
In 2017, as part of an inheritance tax planning strategy, the Husband transferred some £77.8m worth of assets to the Wife with the intention being that those assets would be placed in trusts to be established in due course for the benefit of the parties 2 children. Those trusts were not established despite trust deeds being drafted and those assets remained in the sole name of the Wife at the point of separation and subsequent proceedings.
Procedural Stages
The High Court accepted that the transferred assets had been “matrimonialised” by the transfer so that the full amount was subject to the sharing principle and awarded the Wife a sum of £45m.
Both parties appealed to the Court of Appeal which held that the source of the assets, rather than the title, was the determinative factor and that therefore the transfer itself had not matrimonialised any of the transferred assets. The Court found that 25% of the assets had been matrimonialised due to the contributions of both parties during the marriage, and therefore reduced the award made to the Wife to £25m.
The Wife subsequently appealed that decision to the Supreme Court.
Decision and Reasoning
The Supreme Court unanimously dismissed the appeal and endorsed the Court of Appeal’s narrower interpretation of the matrimonial pot. The judgment sets out 5 key principles [47-56] that are relevant to the application of the sharing principle as below:
- There is a distinct difference between Non-Matrimonial Property (“NMP”) – that which is pre-marital and brought into the marriage by a party or acquired by one party via external gift or inheritance – and Matrimonial Property (“MP”) – that which is a product of the parties’ common endeavour during the marriage.
- The sharing principle applies only to MP and not to NMP (although NMP can be considered in respect of needs or compensation).
- The starting point remains that MP should be shared on an equal basis, but that justified departures from that position may still occur.
- NMP can become MP through the process of “matrimonialisation”. The Court must consider how the parties have been dealing with the asset and whether this demonstrates that, over time, they have treated it as a shared asset. If so, it is matrimonialised and becomes MP.
- The transfer of an asset between spouses in a scheme designed to save tax will not usually show an asset as being treated as shared without proper evidence of intention to share. Such a transfer will not usually constitute matrimonialisation.
The decision draws a clear line around NMP and makes clear that assets are matrimonialised not by the holder of the title of the assets, but the displayed intention of the parties and whether the parties have, over time, treated those assets as shared.
The matter has been returned to the High Court to assess whether the award of £25m meets the reasonable needs of the Wife.
Conclusion
The ruling clarifies the assessment of what is MP and what is NMP very clearly and makes abundantly clear that the overriding factor is the intention and usage of those assets that are in question rather than who was left holding the title when the music stopped.
In order to successfully argue that an asset has been matrimonialised, one would need to show that the other spouse intended for that asset to be treated as shared. This argument becomes stronger with the passage of time and is more likely to be favourable where it can be shown that an asset has been treated as shared for a substantial period of time.
It is important to note that, as in Standish, the assets can be partly matrimonialised to reflect that some remains NMP as pre-marital wealth, and some becomes MP through continued endeavour during the marriage. In those circumstances, the MP is subject to the sharing principle whilst the NMP is not.
Although Standish involves significant assets, the principles are entirely applicable to more modest cases and have the potential to make a significant difference to the outcome of lower-value cases where one party has brought the lion’s share of assets into the marriage. It is important to bear in mind that the ‘needs’ principle is likely to be at the forefront of the Court’s assessment in circumstances where the assets are not able to properly meet the needs of both parties, and the criteria in s25 MCA 1973 remain the matters to be considered by the Court.
Read the full judgment here –
https://supremecourt.uk/uploads/uksc_2024_0089_judgment_8c95f0cffe.pdf
Author: Joseph Woolley
Joseph Woolley can be instructed by emailing his clerks at clerks@northampton-chambers.co.uk or by telephone at 01604 636271.
Disclaimer:
This publication is intended to be a general summary of the relevant law and/ or guidance at the time of writing. It should not replace legal advice tailored to your specific circumstances. No liability is accepted for any omission or error wherein.