On 2 July 2025 the Supreme Court handed down its judgment in the long running case of Standish v Standish [2025] UKSC 26. The court found that:
- The sharing principle applies only to matrimonial property.
- Matrimonialisation (the conversion of non-matrimonial property into matrimonial property) depends on the manner in which the parties treated the assets over time, and the intentions behind those actions, not on the title to them.
- Transfers into a party’s name (jointly or separately) alone is not enough to matrimonialised an asset.
- Transfers for tax reasons will not imply matrimonialisation.
The facts
Mr Standish, who was 72 at the point of the Supreme Court’s Judgment, had been a very successful banker, moving from the UK to Australia and then to Switzerland, where he was the CFO of UBS. Mr Standish separated from his first wife in 2002 and divorced her in 2003, with an order for financial provision being made in 2004.
Mrs Standish (now 57) and her three children joined Mr Standish in Switzerland in 2004 and the parties were married in December 2005. The parties went on to have two children together.
By the beginning of the parties’ cohabitation, Mr Standish already therefore had very significant wealth. Those comprised investment funds, a farm in Australia of nearly 15,000 acres, a limited company set up through which the farm was run, and a property in Australia, sold in 2010. Mrs Standish had a property in Melbourne and a modest amount in bank accounts.
Mr Standish retired in 2007 and the parties moved to England in 2009 after a brief sojourn in Australia. In 2017 Mr Standish transferred the pre-maritally acquired investment funds worth £77.8 million (£80 million at the time of the trial) to Mrs Standish. The stated intention at the time was to set up trusts so as to avoid UK inheritance tax. The trusts were never established, and the wife retained the assets in her name. The only joint asset during the marriage was the family home in England.
The parties separated in 2020 and divorced. By the time of the trial, the assets were worth £132.6 million, with 72% of those assets being in Mrs Standish’s name. In the financial remedy proceedings that followed, the key issue was whether the transfer of the assets to the wife matrimonialised them, therefore making them available for sharing, whether the wife was entitled in fact to retain them as her assets or whether they retained their non-marital status.
The previous judgments
At first instance, Moor J awarded Mrs Standish £45 million out of the total assets of £130 million. He concluded that most of the investment funds were non-matrimonial property but that they became matrimonial property having been transferred into Mrs Standish’s name. As a result, they were available for sharing between the parties. They would not, however, be shared equally because their non-matrimonial source remained significant. Instead they would be shared 60:40 in Mr Standish’s favour.
Both parties appealed. The Court of Appeal overturned Moor J’s decision, reduction Mrs Standish’s award to £25 million on the basis that 75% of the parties’ assets were non-marital, including those transferred to Mrs Standish. Moylan LJ, giving the leading judgment, found that the transfer into the wife’s name was not the determinative factor in deciding whether the assets were matrimonial or not. Matrimonialisation was a principle to be applied narrowly and the non-marital source of the assets remained significant irrespective of whose name they were in. 75% of the assets transferred to Mrs Standish were non-marital and the remaining 25% should be shared equally. Mrs Standish would receive £25 million instead of £45 million – said to be the largest reduction on appeal of a matrimonial award in English legal history. The case was remitted to the High Court to assess whether Mrs Standish’s needs could be met within that award.
The Supreme Court’s conclusions
Mrs Standish appealed. In a succinct 20-page joint judgment, Lord Burrows and Lord Stephens (with whom the remainder of the justices agreed) summarised the principles set down in the leading cases of White v White [2001] 1 AC 596 and Miller v Miller; McFarlane v McFarlane [2006] UKHL 24.
The court noted that an applicant for financial relief following divorce or dissolution is entitled to a fair outcome. In order to reach such an outcome, the court should approach the case with consideration being given (to the extent appropriate in the circumstances of the case) to four principles:
- The Needs Principle: That where possible and fair to do so, the court should ensure that the parties’ needs are met.
- The Compensation Principle: That a spouse who has given up valuable opportunities by marrying should be compensated.
- The sharing principle: That the matrimonial assets should be shared ‘usually but not invariably, on an equal basis’.
- The non-discrimination principle: That there should be no discrimination in favour of the spouse who has been the principal wage-earner at the expense of the spouse who has been the home-maker and/or child-carer.
As to the distinction between matrimonial and non-matrimonial property, the court held that:
- “[47] … there is a conceptual distinction between matrimonial and non-matrimonial property. In general terms, this distinction turns on the source of the assets. Non-matrimonial property is typically pre-marital property brought into the marriage by one of the parties or property acquired by one of the parties by external inheritance or gift. In contrast, matrimonial property is property that comprises the fruits of the marriage partnership or reflects the marriage partnership or is the product of the parties’ common endeavour.” The issue is not whose name the asset is in – it is its source.
- “[48] … the time has come to make clear that non-matrimonial property should not be subject to the sharing principle (though non-matrimonial property can be subject to the principles of needs and compensation).” There is no example of any case where sharing of non-matrimonial property was the outcome and the court considered that it was wrong to retain the theoretical potential to do so. Sharing non-marital property would make the concept of non-marital property meaningless.
- “[49] … the sharing of the matrimonial property should normally be on an equal basis. Although there can be justified departures from that, equal sharing is the appropriate and principled starting position. Indeed, once non-matrimonial property is excluded, much of the justification for not applying equality in sharing fades away.”
- As to Matrimonialisation: “what starts as non-matrimonial property may become matrimonial property.” This ‘matrimonialisation’ is not a narrow concept as Moylan LJ held, nor is it a wide concept. It is to be applied as appropriate in the individual case.
- Matrimonialisation rests on how the parties, over time, have treated the asset and whether the evidence shows that they have treated it as shared between them. So where a party has intended to use a non-marital asset for the benefit of the family and has done so by translating it into the actual use and enjoyment of the family, it is likely that it will have become matrimonialised. Examples (not an exclusive list) can be found in K v L [2011] EWCA Civ 550.
- The search, as ever is for a fair outcome and in that search “it is the parties’ treatment of what was initially non-matrimonial property, over time, as shared between them, that is central in deciding the fairness of that property being viewed as matrimonialised.”
- Where the non-matrimonial assets are so small a percentage of the assets as to be insignificant, it will not be fair for the court to engage in the exercise of identifying and distributing the non-marital assets. The court will look at the whole of the pot.
- “[56] … In relation to a scheme designed to save tax, under which one spouse transfers an asset to the other spouse, the parties’ dealings with the asset, irrespective of the time period involved, do not normally show that the asset is being treated as shared between them. Rather the intention is simply to save tax. Tax planning schemes to save income tax, involving transfers of assets from one spouse to another, are commonplace given that there is no capital transfer tax on transfers between spouses. However, transfers of capital assets with the intention of saving tax, do not, without some further compelling evidence, establish that the parties are treating the capital asset as shared between them.”
What next
The conclusion of the Supreme Court is in some ways very simple: In cases where there are more assets than required to meet the parties’ relationship-generated needs, non-marital assets will not be shared. Those assets will be identified not by the name on the title deeds or share certificates but by their source. Non-marital assets will become marital where a fair conclusion to draw from the parties’ treatment of them is that they intended that they would benefit the family as a whole, notwithstanding their source. Tax minimisation alone will not be sufficient.
What though of the real-life examples? It is common for parties to put a business, often established by one party before the marriage, into joint names so that the home-maker’s tax allowances can be utilised. Will that matrimonialise the asset? Arguably yes – it is done for the benefit of the family for whom the income is applied. But the original owner may say that they did so purely for tax reasons. Where the other spouse works in the business that argument may carry little weight. But where they do not, what then? In many cases the receiving party does not work in the business and does not directly receive the income from it, which is drawn by the original owner and paid towards a mix of joint and sole outgoings. Is that mere tax minimisation and therefore incapable of matrimonialising the asset? Arguably so on the Supreme Court’s analysis, or at least on its own.
What of an investment fund, trust or investment property placed in one party’s name but from which an income is drawn to support the family. Is that income enough to matrimonialised the assets? It is for the benefit of the family, as no doubt the investment income from Mr Standish’s assets will have been. Indeed, in Standish the intention appears to have been that the children would in the end receive the capital but that was not sufficient. Much will turn on what has happened to the income and how it has been managed. In WX v HX [2021] EWHC 241 (Fam) the husband had managed an investment portfolio in the wife’s name to maximise the profit. That was sufficient to matrimonialised it. The same might be said for an investment property brought in by one spouse but managed by the other.
Another question is what will happen when the distinction between marital and non-marital assets is unclear – where they have been mingled. In Hart v Hart [2017] EWCA Civ 1306 the Court of Appeal concluded that the court would need to make a case management decision as to whether and how to investigate the issue and whether to reflect the non-marital assets by identifying and excluding them while sharing the remainder, or simply adjusting the overall percentage division away from 50:50. This line of authority is not referred to or discussed, though not apparently disapplied by Standish. Nor were the line of cases dealing with the ‘springboard’ effect of businesses that are pre-acquired but grown during the marriage. That line of authority presumably remains.
In Standish the Supreme Court separated out the element of the assets transferred to Mrs Standish that were marital and non-marital – this distinction relied on the former reflecting Mr Standish’s income during 2004 and 2007 and the growth on that, to which Mrs Standish had contributed as the home-maker and child-carer, and the latter being the remainder, which was brought in by Mr Standish. The Court did not interfere with the Court of Appeal’s assessment of that as being 25% of the transferred assets. Taken with the joint assets, the matrimonial pot was therefore £50 million to be divided equally. There had been no matimonialisation – the non-marital assets remained non-marital and the balance were by their source marital.
The Court of Appeal had reached that conclusion because the assets did not fall within the three specific situations set out in by Wilson LJ in K v L, and therefore because the principle of matrimonialisation was a narrow one, they could not be matrimonialised. The Supreme Court disagreed. Wilson LJ’s three examples were just that – examples and not an exclusive list. The important factor was that there was “nothing to show that, over time, the parties were treating the … assets as shared between them. Rather the transfer was in pursuance of a scheme to negate inheritance tax and it was for the benefit exclusively of the children.” The intention was not to benefit the wife, but to benefit the children, by reducing the amount of their inheritance that would be lost to tax. It was not to share the assets between them.
The Supreme Court gave the example that a home or a holiday home may benefit the children, but also both spouses. That may lead to a Matrimonialisation. But where the intent is to avoid inheritance tax, which does not apply to inheritances between spouses, there can be no argument that the intention was to share the assets. There will be many cases, however, where the distinction is far less clear and the trend towards expensive and lengthy argument about matrimonialisation is likely to continue.
While the Supreme Court has brought some much-needed clarity to this area, it is arguably a missed opportunity to give wider guidance as to how the principles should apply to those who are not quite so vastly wealthy as the Standishes.
Rupert Chapman
Magdalen Chambers
Exeter
3 July 2025