The Supreme Court’s decision in Standish v Standish [2025] UKSC 26 marks a defining moment in divorce and family law. At its heart lies a critical question: when does a substantial transfer of wealth between spouses during marriage become shared property? In resolving a dispute over nearly £80 million in assets, the Court clarified the limits of the sharing principle, drawing a sharper line between matrimonial and non-matrimonial property. This judgment offers vital guidance for practitioners, high-net-worth couples, and anyone navigating financial claims on divorce.
This article from Consultant Family Solicitor Amera Nazib explores the decision and what this means for family law.
What is Standish v Standish about?
Standish v Standish is a landmark Supreme Court decision, addressing whether substantial assets transferred between spouses during marriage become matrimonial property subject to equal division, or remain non-matrimonial, and so excluded from sharing on divorce. The case focuses on an £80 million asset transfer in 2017 by the husband to the wife, and explores the limits of what is known as matrimonialisation (when assets owned by one spouse before the marriage, or received as a gift or inheritance, become matrimonial property).
What was the central legal issue in the appeal?
The core issue was whether assets originally belonging solely to the husband, and transferred to the wife during the marriage for inheritance tax (IHT) planning, became matrimonial property through that transfer, thus subject to the sharing principle under section 25 of the Matrimonial Causes Act 1973. The wife argued the transfer amounted to a gift, implying equal ownership. The husband claimed the assets retained their non-matrimonial character and so should not be considered matrimonial property upon divorce.
How did the Court define ‘matrimonial’ vs. ‘non-matrimonial’ property?
The Supreme Court reaffirmed a key distinction:
- Matrimonial property: Assets acquired during the marriage as part of the couple’s shared economic activity, for example employment income or jointly accumulated wealth.
- Non-matrimonial property: Assets brought into the marriage or acquired through inheritance/a gift from external sources, including pre-marital wealth.
Under this framework, only matrimonial property is usually subject to the sharing principle.
What is the ‘sharing principle’?
It’s one of three judicially developed principles guiding fair financial outcomes on divorce. These three are:
1. Needs: The court ensures both parties can meet their financial needs post-divorce.
2. Compensation: Recognises sacrifice, such as giving up a career to care for children.
3. Sharing: Spouses should equally share the wealth generated through the marriage, unless fairness dictates otherwise.
The Standish case focused solely on the sharing principle.
So, what happened in Standish v Standish?
In 2017, the husband transferred £77.8 million in investment assets to the wife’s sole name. The move aimed to avoid UK inheritance tax by exploiting the wife’s non-UK domicile status and to benefit their two children via future trusts. But no trusts were ever set up and the wife retained the assets.
Upon divorce, the wife claimed the assets had become matrimonial through this transfer. The High Court (Moor J) agreed in part, awarding her £45 million. The Court of Appeal overturned this, ruling most of the transferred assets remained non-matrimonial. The wife then appealed to the Supreme Court.
What did the Supreme Court decide?
The Court dismissed the wife’s appeal and upheld the Court of Appeal’s ruling. It was found that the sharing principle applies only to matrimonial property. Non-matrimonial assets do not become matrimonial simply by being transferred between spouses, unless their treatment shows the couple regarded them as shared over time.
Did the Court introduce any new legal principles after Standish v Standish?
Yes, Standish v Standish [2025] UKSC 26 marks a turning point in the application of the sharing principle in financial relief on divorce. The Supreme Court laid down five legal principles that clarify and reshape the boundaries of matrimonial law:
1. There is a clear conceptual distinction between matrimonial and non-matrimonial property. Matrimonial property refers to assets acquired through the joint efforts of the parties during the marriage, such as income and jointly built wealth. Non-matrimonial property includes assets acquired before the marriage, or through gifts or inheritance from outside sources. This foundational distinction is critical to how financial orders should be approached.
2. The sharing principle applies exclusively to matrimonial property. The Court made explicit that the sharing principle requiring equal distribution is not to be applied to non-matrimonial property. While needs and compensation might justify some transfer of non-matrimonial assets, those assets are otherwise ring-fenced from equal division unless clearly integrated into the marriage.
3. Equal division is the default position for matrimonial property. Where property is classified as matrimonial, it should ordinarily be shared on a 50:50 basis. This serves as the principled starting point, with departures from equality requiring specific and justified reasons.
4. Matrimonialisation depends on how the parties have treated the asset over time. Assets do not become matrimonial simply by being transferred between spouses. For non-matrimonial property to become matrimonial, there must be evidence that the couple, over a meaningful period, treated the asset as shared. For example, by using it for family purposes or co-mingling it with joint funds.
5. Transfers made solely for tax planning do not amount to matrimonialisation. Where assets are transferred between spouses for tax mitigation, such as inheritance tax or income tax efficiency, the Court ruled that this does not indicate an intention to share the assets. Even if the legal title changes, if the purpose was strategic (e.g. to set up a trust for children), and not intended for shared spousal benefit, the transferred asset remains non-matrimonial.
What does ‘matrimonialisation’ actually mean after this ruling?
The concept describes how non-matrimonial property can become matrimonial, and therefore sharable, based on conduct.
The Court gave examples of matrimonialisation (from K v L [2011] and other authorities), such as:
- Pooling inherited wealth into joint bank accounts.
- Using non-marital funds to purchase the family home or jointly enjoyed assets.
- Holding property jointly or openly treating it as family wealth.
However, matrimonialisation does not occur:
- Simply because of title transfer.
- Where the property was clearly intended for a third-party purpose (e.g. tax, children).
- If there’s no pattern of shared use or benefit.
How was this applied to the facts of Standish v Standish?
- The assets were pre-marital, originating from the husband’s exceptional career prior to 2004.
- The 2017 transfer to the wife was purely for Inheritance Tax reasons.
- Both parties expected the funds to be placed into trusts for the children.
- There was no evidence they treated the assets as a shared resource between themselves.
Hence, the transfer lacked the hallmarks of matrimonialisation.
What impact did this ruling have on the final award?
The Court of Appeal concluded that just 25% of the £80 million qualified as matrimonial property stemming from the couple’s joint contributions during 2004 to 2007, and that portion should be split equally. The wife’s revised award was approximately £25 million, not £45 million as originally awarded. The remainder remained with the husband as non-matrimonial property. The case was remitted for a needs assessment to determine whether £25 million sufficed for the wife’s future needs, especially given the lengthy marriage.
What are the broader implications for divorce and family law practice?
This judgment has several major ripple effects such as:
- Greater clarity: Courts, practitioners, and litigants now have firmer guidance on when non-marital assets remain ring-fenced.
- Asset protection: Pre-marital wealth remains more secure unless actively converted into shared use.
- Reduced discretion: Judges are discouraged from treating non-matrimonial property as sharable unless clearly justified.
- Emphasis on fact-specific conduct: Courts must evaluate how assets are treated in practice, not just by title.
Could this affect lower-value or needs-based cases?
In most everyday divorces, the needs principle predominates because assets are insufficient to exceed basic living costs. Standish is most influential in high-net-worth (big money) cases, where needs are already met, and the dispute is about surplus distribution. However, it still signals caution to parties assuming that inter-spousal transfers or joint enjoyment automatically imply sharing.
Any takeaways for legal professionals and couples?
- For practitioners: Detailed evidence of asset treatment is essential, and intentions, joint use, and actions over time will drive classification.
- For spouses: A strategic reminder that merely gifting or titling an asset to a spouse doesn’t automatically make it joint.
- For drafters: Clear documentation, such as wills, trust deeds, and prenups can help pre-empt disputes over classification.
Conclusion
Standish v Standish is a pivotal reminder that in family law, form does not override substance. The focus lies in the pattern of mutual ownership and use, not in whose name an asset rests. The decision narrows the scope of the sharing principle, reinforcing the line between marital partnership and individual ownership, at least where tax planning and pre-marital wealth are concerned.
The content of our articles is provided for general informational purposes only and should not be considered a replacement for professional advice specific to your situation. We are always happy to discuss any queries or concerns you may have. We cannot be held responsible for any loss resulting from actions taken or decisions made based on this article.
View Profile
Contact our team
Location
Business Hours
