The judgment reinforces a clear distinction between matrimonial and non-matrimonial assets.
Today’s anticipated Supreme Court judgment in Standish v Standish upheld the Court of Appeal’s earlier ruling that funds which are not considered to be matrimonial in nature should not be subject to the sharing principle that is typically applicable in matrimonial cases.
In this case, the husband had generated a significant amount of wealth prior to his marriage. He transferred £80 million to his wife for the purpose of tax planning in the three years before they separated- the intention being to set up a trust for the benefit of the parties’ children. The Supreme Court held that the portion of this sum which had been generated before the marriage was not to be shared with the wife.
Essentially, what this means is that the sharing principle does not apply to non-matrimonial property, unless it is required to meet the needs of the parties, or as compensation for a loss that has been generated because of the marriage.
It follows that only matrimonial property—assets generated by or during the marriage—are subject to the principle of sharing. Non-matrimonial property, including assets acquired before marriage or by external gift/inheritance, remains outside the reach of the sharing principle (unless there is a clear need or for compensation).
The Court further explained that “matrimonialisation” depends on how parties treat the asset over time; a transfer between spouses for tax planning, as in this case, does not constitute shared ownership and does not “matrimonialise” the asset.
In practical terms, this means transfers for tax purposes alone will not convert non-matrimonial property into matrimonial property. For practitioners, this judgment goes further than the Court of Appeal judgment in providing essential guidance on what should happen to assets that have been acquired outside of the marriage, asset classification and the boundaries of the sharing principle in financial remedy proceedings.
See the full Judgement here: Standish (Appellant) v Standish (Respondent)
For further advice about the impact of this ruling or about how to protect pre-acquired assets on marriage, contact our Family Law team on 01732 747900 or [email protected]
This article is for general information only and does not constitute legal or professional advice. Please note that the law may have changed since this article was published. We do not accept responsibility or liability for any actions taken based on the information in this article.
