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Author
Introduction
The hotly anticipated judgment in the case of Standish v Standish [2025] UKSC 26 has been handed down by the Supreme Court this morning. It centred around whether assets generated by the husband before the marriage remained non-matrimonial and should therefore be retained by him upon the couple’s divorce, or whether they were “matrimonialised”, giving the wife a claim to share them.
In May 2024 the Court of Appeal drastically reduced the original High Court award to Mrs Standish from £45 million to a mere £25 million of couple’s £132 million of assets. Her unhappiness at this result led to her being subsequently granted permission to appeal to the UK Supreme Court.
The Supreme Court has today unanimously dismissed Mrs Standish’s appeal, deciding that the assets in issue, which had been transferred by the husband into the wife’s name, remained his non-matrimonial property and should be retained by him.
Background
Mr and Mrs Standish married in 2005. It was a second marriage for both of them and they had two children together. Prior to the marriage Mr Standish had accrued substantial wealth through a successful career in investment banking from which he retired in 2007.
In 2017, as part of a tax-planning exercise and in an effort to protect against inheritance tax, Mr Standish was advised to transfer £78 million to his wife (who would have a different domicile status), with the intention being that she would then transfer the assets into a discretionary trust in Jersey for the benefit of their children. However, the transfer into the trust never happened. Before the trust was established Mrs Standish applied for divorce whilst still holding the £78 million (the 2017 Assets).
Both parties applied to the High Court to resolve their finances, with the 2017 Assets becoming the centre of the debate. The wife claimed that the marriage was a ‘partnership of equals’ and as such there should be a 50:50 split. However, the wife had also asserted that upon transfer, the assets became her separate property.
The husband disputed this, claiming he had never intended to share ownership of the 2017 Assets and asserting that even if the court found that the assets had been “matrimonialised”, the division should not be equal as they resulted from his pre-marital endeavours.
High Court decision
In the High Court, Mr Justice Moor rejected the wife’s separate property claim and found that by transferring the asset to the wife, the husband had “matrimonialised” the property, meaning the sharing principle applied. Moor J concluded that as a substantial amount of the wealth had accumulated from past endeavours, it was therefore appropriate for the matrimonialised 2017 Assets to be divided unequally in the husband’s favour. This resulted in the wife receiving £45 million of the couple’s £132 million total assets.
Court of Appeal decision
Both parties appealed the High Court’s decision on the following grounds:
- Title factor: the wife asserted the 2017 Assets were separate non-matrimonial property which became hers upon the action of transfer taken by the husband; and
- Source factor: the husband asserted that the source of the wealth should be the deciding factor based on his actions generating the wealth.
The husband’s appeal was successful. The Court of Appeal agreed that there should be no equal sharing of the assets and rejected the wife’s separate property claim affirming it was ‘nonsense’ that she became the source of the wealth as the source was a reflection of generation not title.
The Court of Appeal decided that the 2017 Assets were 75% non-matrimonial (and should therefore be retained by the husband) and 25% matrimonial (which should be divided equally between the parties). The wife’s overall award was as a result reduced from £45 million to £25 million. She appealed, saying that too much weight had been given to the husband being the original source of the assets and that the transfer of £78 million was a gift to her.
Supreme Court decision
The Supreme Court today unanimously dismissed the wife’s appeal.
They confirmed that the distinction between matrimonial and non-matrimonial property turns on the source of an asset. Non-matrimonial property is brought into the marriage by one of the spouses or received from an external source (such as family) by gift or inheritance. By contrast, matrimonial property is the fruits of the marriage partnership or the couple’s common endeavour.
The justices noted that the Family Courts have wide powers when considering the division of assets on divorce and will take into account all the circumstances, including three particular principles:
- Needs: The needs of the parties should be met if possible;
- Compensation: where a spouse has given up valuable earning opportunities, they should be compensated; and
- Sharing: The fruits of the marital endeavour should be shared and the starting point is an equal division.
They also acknowledged the principle that the court will not discriminate between the main earner and the party who has taken on primary responsibility for looking after the home and children.
The Supreme Court confirmed clearly that non-matrimonial property should not be subject to the principle of “sharing” (this has long been a subject of debate), but that non-matrimonial property can still be subject to claims on the basis of needs or compensation.
Matrimonial property should normally be shared equally.
They confirmed that non-matrimonial property may become matrimonial property through “matrimonialisation” (a term created in previous case law). The important question is whether matrimonialisation has occurred, and to decide this what is important is how the parties have been dealing with the asset and whether this shows them treating it as shared.
The Supreme Court found that in the Standish case, the transfer of the 2017 assets to the wife was to save inheritance tax for the benefit of the children – at no point were these assets treated as shared between the husband and wife.
The Supreme Court confirmed that although they didn’t agree with all of the Court of Appeal’s reasoning, they approved the decision that the husband was entitled 75% of the 2017 assets and that 25% was matrimonial and should be shared equally between the husband and wife. As a result, the wife’s award was not increased.
Conclusion
The Supreme Court has clarified a number of the principles that are debated by family lawyers in offices and courts across England and Wales every day. They have confirmed that it is the source of an asset, not in whose name it is held, that is most important. The principle of sharing does not apply to non-matrimonial property. The way the couple deal with non-matrimonial property during the marriage and whether they treat it as shared is the central question in determining whether it has been transformed from non-matrimonial to matrimonial property.
As identified by the Justices during the hearing, whilst the Standish case is a ‘big money’ case and most couples do not have tens or hundreds of millions of pounds to divide, the effect of this decision and its principles will apply to all divorce cases across England and Wales.
Should you wish to discuss any of the issues raised in this article, please contact Felicity Chapman.