Supreme Court clarifies meaning of 'matrimonial property' and 'non matrimonial property'

Every private family law practitioner and his dog across the country has been on the edge of their seat waiting for the highly anticipated Standish v Standish Supreme Court judgement, and on 2^nd July 2025 we were gifted with just that.

In recent years, the concept of ‘matrimonialisation’ has become a trendy new term in family law. Despite the fact it will show a red squiggly line under it in Microsoft Word and does not appear in the Oxford English Dictionary, has not stopped barristers arguing over its existence in divorce financial remedy proceedings. So how has Standish helped?

But first……….

Background:

The case of Standish v Standish concerns a couple with significant wealth and an event within their marriage that changed everything (including legal precedent).

In 2017, Mr Standish, a wealthy and accomplished Banker, transferred a portfolio of assets (‘the 2017 assets’) to his wife Mrs Standish in order to circumvent an inheritance tax liability by taking advantage of Mrs Standish’s non-UK domiciled status being that her domicile of origin is Australia. The intention was that Mrs Standish would set up a trust for these assets to be transferred into. Instead, she kept the assets in her sole name and subsequently filed for divorce. At the time of transfer, the assets were worth approximately £80 million, in addition to the former matrimonial home, a farm, and the accompanying farm business.

The issue was whether these assets were considered matrimonial property, and therefore subject to the principle of ‘sharing’ between the couple upon divorce, or non-matrimonial property and therefore not subject to sharing. There are three principles to apply when dividing assets upon divorce: ‘needs’, ‘compensation’, and ‘sharing’.

Terminology:

‘Needs’ applies where an assessment is required as to how the assets of the marriage will be utilised to meet the parties’ basic needs such as housing, income, pension for when they can no longer work. However, this principle did not apply in Standish, as evidently, both parties’ needs could be met with the assets of the marriage alone.

‘Compensation’ is the principle that a spouse should be financially compensated for being personally financially ‘worse off’ as a result of the marriage. For example, giving up high value job prospects in order to care for the family. This also did not apply in Standish as neither party gave up fruitful prospects in favour of the marriage.

‘Sharing’ applies in ‘big money’ cases which this case clearly can be defined as. As neither of the other principles apply, we are left with the ‘sharing principle’. The starting point of sharing is 50/50 and departure from this equality must be justified. Deciding what property is subject to the sharing principle is our next issue.

So, what is ‘matrimonial property’? There isn’t a rock-solid definition, however it has been construed to mean property that has accrued as a result of hard work during the marriage and/or a joint endeavour of the couple.

Therefore, ‘non-matrimonial property' is an external source of wealth not within a marriage such as pre-marital property, gift or inheritance which has been brought into the marriage by one party.

Mrs Standish argued that the 2017 assets were matrimonial property and therefore she is entitled to half. Mr Standish argued that the 2017 assets were non-matrimonial property and therefore not subject to sharing.

The original decision:

The Judge in the first instance ruled in the Wife’s favour that by transferring the 2017 assets to the wife, the husband had therefore ‘matrimonialised’ the property and rendered all of it subject to the sharing principle. The Judge did, however, give some credit to the Husband for being the source of the 2017 assets by dividing the 2017 assets up approximately 60/40 in favour of the Husband. Ergo, the Wife received £45 million (34% of total assets), and the Husband received over £87.6 million. To you and me, this would seem like more than enough money to comfortably live on. However, both Mr and Mrs Standish disagreed, and both separately appealed to the Court of Appeal.

The Court of Appeal:

The CoA held that the lower court had placed too much emphasis on the fact that the 2017 assets were in the Wife’s name, and she therefore had legal title. This highlights a further dispute within family judicial interpretation known as ‘source vs title’, the debate of whether to place emphasis and credit upon the legal title (i.e. whose name the assets are in) of assets or the source of assets (i.e. whom the assets came from/accrued by).

The CoA ruled that the 2017 assets were split 75/25 matrimonial property/non-matrimonial property, respectfully. So, the 75% was non-matrimonial and therefore not subject to sharing and moreover the Husband gets the full 75%. Therefore, 25% of the 2017 assets were non-matrimonial property and subject to sharing. Starting at 50/50 as per the sharing principle, Husband gets half of the 25% and Wife gets the other half of the 25%.

They further ruled that by transferring the 2017 into his Wife’s name, the Husband did not matrimonialise the assets and no such matrimonialisation occurred.

The Judgement:

The Supreme Court ruled in favour of the Court of Appeals’ interpretation.

Section 25 of Matrimonial Causes Act 1973, the legislation which governs this area of law, states that the court must take into account all circumstances of the case when assessing the division of finances upon divorce.

The Supreme Court also included 5 helpful guiding principles in such cases of alleged matrimonialised property in big money cases. They are simplified as follows:

1. We have finally been given a kind of definition of matrimonial property and non-matrimonial property.

From paragraph 47 of the Judgement, matrimonial property is “typically pre-marital property brought into the marriage by one of the parties, or property acquired by one party by external gift or inheritance”.

Matrimonial property is “property which comprises the fruits of the marriage, reflects the marriage partnership or is the product of the parties’ common endeavour”.

The court also clarified that title is not determinative as to the type of property we are looking at.

2. The sharing principle as detailed above only applied to matrimonial property.
3. The starting point for sharing matrimonial property is 50/50 (a departure from which requires proper justification).
4. The court accepts that the concept of matrimonialisation can occur. A pointer for assessing whether this has occurred is to consider how the parties have been treating the asset over time. Have the parties been treating the asset as shared between them.
5. A transfer between spouses, although useful from a tax planning perspective, does not, in of itself, determine that matrimonialisation has taken place.

Whilst “one swallow does not a summer make”, an inter-spousal transfer of assets does not a matrimonialised asset make.

We hope that clears up some of the confusion around a once in a few decades opportunity in legal precedent to define, clarify and guide family law practitioners in such a landmark case!