The Supreme Court clarifies the law on matrimonial versus non matrimonial assets

Standish v Standish [2025] UK SC 26

The Supreme Court has today dismissed an appeal concerning the ownership of £80 million in divorce proceedings. The Supreme Court found that the sharing principle does not apply to non-matrimonial property and clarified when assets will and won’t be treated as matrimonial property subject to sharing on divorce.

The long established principle when dividing assets on divorce is a starting point of equal division of matrimonial assets (regardless of whose name the assets are in). That starting point is then crosschecked against the criteria provided in s25 of the Matrimonial Causes Act.

Today’s judgment helps us understand when assets may be considered matrimonial and subject to the sharing principle, or non-matrimonial and excluded from sharing.

Background

The crux of the case is that the husband transferred £77 million (now valued as £80 million) to the wife in 2017, for tax planning purposes. The couple had discussed establishing two offshore trusts for their two children. However, the wife never established the trusts and continued to hold the 2017 assets in her sole name.

The lower courts held that “most of” the funds involved in the 2017 transfer were the husband’s pre-marital wealth and therefore non-matrimonial, but that by virtue of the transfer, the assets had become matrimonial, and therefore all of the £80 million was subject to the sharing principle. The court held that the 2017 assets should be divided with 60-40 in the husband’s favour, and the wife was awarded £45 million. Both parties appealed this decision.

The Court of Appeal clarified that the previous judge had incorrectly made the transfer of title from the husband to the wife the determinative factor in determining whether the 2017 assets were matrimonial, whereas the source of the assets was the determinative factor. The Court of Appeal subsequently ruled that at least 75% of the 2017 assets were not matrimonial and reduced the wife’s award to £25 million. The wife appealed this decision.

Today, the Supreme Court dismissed the appeal, ruling that the sharing principle does not apply to non-matrimonial property.

Key takeaways from the Supreme Court’s judgement

• The intention of the parties really matters when considering whether non-matrimonial assets have become matrimonial, ie; how the parties have been dealing with the asset and whether this shows that, over time, they have been treating the asset as shared between them.
• The source of assets and parties’ intent are crucial when considering whether assets are matrimonial and should therefore be subject to the sharing principle.
• Transfers of capital assets with the intention of saving tax do not generally establish that the parties are treating the capital asset as shared between them.
• The case serves as a reminder that documentation, intent and conduct around asset ownership remain crucial in determining financial outcomes on divorce.

For more details, the full judgement can be found at Standish (Appellant) v Standish (Respondent) - UK Supreme Court

In light of the judgement, it is thought that many more people may now turn to pre- and postnuptial agreements as a further way of clarifying and protecting pre-marital or external sources of wealth.

For assistance in respect of family matters, the Family Team here at Leathes Prior would be happy to assist you, please contact the team via info@leathesprior.co.uk or call 01603 610911.