Standish v Standish: matrimonial property, the sharing principle and “matrimonialisation”

At the time of writing, a week has passed since judgment was handed down by the Supreme Court in Standish v Standish [2025] EWCA Civ 567. By this time, most (if not all) financial remedy practitioners will have read and digested it. Nevertheless, this blog aims to summarise the main points raised in the judgment.

Whilst it is not an earth-shattering judgment which will change the approach of courts and practitioners to matrimonial and non-matrimonial property in sharing cases, it helpfully summarises much of the relevant case law of the past two decades whilst making clear that non-matrimonial property shall not be the subject of the sharing principle.

The parties began their relationship in 2003, the same year that the husband was appointed Chief Financial Officer of UBS Group, which necessitated a move to Switzerland from Australia, where he had been living. The wife and her children joined him in Switzerland in 2004, and the parties married in December 2005. The husband retired in 2007, though they continued to live in Switzerland until 2008 when they returned to Australia. The family moved into a home in England in 2009, which became the family home (the value of which was agreed at £21.6 million in 2022). Decree nisi was pronounced in September 2020.

In total, the assets in the case amounted to £132.6 million. A considerable amount of the husband’s wealth was accumulated prior to the commencement of the parties’ relationship. On the husband’s case, the pre-2004 assets were worth £57 million as of June 2004 (uprated to £155 million as at the date of the hearing before Moor J). The wife’s assets were a property in Melbourne, sold in 2011 for AUS$5.6 million, and inheritance of AUS$626,340.

In 2017 the husband transferred investment funds worth approximately £77.8 million into the wife’s sole name (the value of which increased to approx. £80 million at the time of the hearing before Moor J). That year, wife was also issued shares in Ardenside Angus, an Australian farming company owned by the husband. The effect of the transfer was that, of the £132.6 million in assets, £95.7 million (72.17%) was in the wife’s name. The impetus for the transfer was tax planning, put simply.

In the High Court, Moor J held that most of the transferred funds came from the husband’s pre-marital wealth and were non-matrimonial property. However, Moor J determined that the effect of the transfer was to matrimonialise the previously non-matrimonial property, hence all £80 million was subject to the sharing principle. As such, the matrimonial property amounted to £112,631,062, which was to be divided with 60% to the husband and 40% to the wife to reflect the source of the funds. The wife’s share was rounded down to £45 million, and the court determined that this was a sufficiently large sum of money to render a needs assessment unnecessary.

The Court of Appeal held that it was incorrect, at first instance, to treat the transfer as the determinative factor in characterising the 2017 Assets, stating, instead, that the source was determinative. The transfer itself did not matrimonialise those assets, and 75% of the 2017 Assets remained non-matrimonial. As such, the correct figure for all the matrimonial property to be subject to the sharing principle was £50.48 million, hence a fair outcome would be for the wife to receive approximately £25 million. However, the Court of Appeal was unable to fairly determine the wife’s needs and remitted the matter for a needs assessment.

After citing relevant parts of the judgments in White v White [2001] 1 AC 596 and Miller/McFarlane [2006] UKHL 24, the Supreme Court set out five key principles, which may be summarised as follows:

1. There is a “conceptual distinction between matrimonial and non-matrimonial property” [para 47], which generally turns on the source of the assets. Non-matrimonial property is, typically, pre-marital property. Who has the title to the property is not determinative in deciding what is matrimonial property.
2. Secondly (and perhaps the most significant part of the judgment for practitioners), non-matrimonial property should not be subject to the sharing principle.
3. The sharing of matrimonial property should normally be on an equal basis.
4. What starts as non-matrimonial property may become matrimonial. In other words, the court accepted that “matrimonialisation” may be an appropriate label. The court cited, with approval, Wilson LJ’s obiter in K v L [2012] 1 WLR 306, also noting that the three categories of marimonialisation were not exclusive, and that there is no good reason to treat matrimonialisation as a narrow concept. What is crucial is whether the parties have treated the property as a shared asset. Additionally, the court confirmed that, as a matter of “pragmatic fairness”, if the percentage of assets which are non-matrimonial is not sufficiently significant to justify an evidential investigation, “one should simply treat it all as matrimonial property” [para 55].
5. In relation to a scheme designed to save tax, the parties’ dealings with the asset do not normally show that the asset is being treated as shared between them: “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” [para 56].

Noting that there was nothing to show that, over time, the parties were treating the 2017 Assets as shared between them, rather the transfer was in pursuance of a scheme to negate inheritance tax for the exclusive benefit of the children [para 61]. As such, the court agreed with much of Moylan LJ’s judgment in the Court of Appeal, determining that “none of the non-matrimonial proportion… of the 2017 Assets was matrimonialised” [para 63].

It is anticipated that this judgment will be cited in inter-party correspondence and position statements where there is a dispute over whether property is matrimonial or not, or whether it has become matrimonialised. It is notable that the Supreme Court cites (at para 40) Lord Nicholls’s speech at para 12 in Miller/McFarlane, that “in most cases the search for fairness begins and ends with needs”. Reliance upon a Supreme Court judgment in which the assets in the case amounted to £132 million is unlikely to assist in a needs case. Similarly, the principles set out within this judgment seem, explicitly, to be applied to the sharing principle as distinct from compensation.

The effect of the second principle cited by the court is to establish as a matter of law what has been the practical reality of the court’s approach to sharing cases for some time. Lord Mostyn’s description in JL v SL (No 2) [2015] EWHC  360 (Fam); [2015] 2 FLR 1202 of a case where non-matrimonial property would be shared as being “as rare as a white leopard” is, appropriately, cited within the judgment. Indeed, if it was accepted that non-matrimonial property could be shared under the sharing principle, it could well become pointless to argue over whether property is matrimonial or not.

In many ways this, alongside the third principle, that matrimonial property should generally be shared on an equal basis, should make advising clients more straightforward. If the general principle is that only matrimonial property will be shared, and it is to be shared on a 50/50 basis, once a determination is made on whether property is matrimonial or not, the calculus becomes simple. There will, of course, continue to be cases where the length of a marriage or unequal contributions justify a departure from an equal division (S v AG [2011] EWHC 2637 (Fam), para 9).

Similarly, the fifth principle could reduce arguments arising from transfers intended for tax saving purposes. Of course, in this case, the wife conceded that the 2017 transfer was intended for the purpose of negating inheritance tax. If the intention of such a transfer is in dispute, one might expect evidence from the transferor’s financial advisor to be of assistance.

Matrimonialisation, however, is likely to remain an area rife for dispute. Of course, where the percentage of non-matrimonial assets as a proportion of the pot is insignificant, it seems courts will not entertain arguments that the character of this property should be subject to evidential investigation.

However, there remains a grey area in cases where non-matrimonial property has been intermingled with matrimonial property to an extent to which its current value cannot be easily identified. There is unlikely to be much room for argument where non-matrimonial property is invested into the purchase of a family home or, perhaps, even to maintenance and renovations. The position remains more complicated in the case of an investment property purchased pre-marriage but maintained utilising wealth accrued during the marriage. Similarly, it may not be so clear where non-matrimonial funds are paid into an account or investment fund alongside matrimonial funds. It follows that, where previously there may have been significant argument over the source of property, more time might be spent debating how that property has been handled by the parties.