Supreme Court ruling in Standish v Standish: Landmark ruling defines the boundaries of matrimonial property

The UK Supreme Court has today (July 2 2025) handed down its much-anticipated judgment in the case of Standish v Standish [2025] UKSC 26, bringing crucial clarity to the treatment of matrimonial and non-matrimonial property in divorce proceedings. This landmark decision will shape the approach of family courts and practitioners for years to come.

Background

The case involved a high-net-worth couple who married in 2005 after living together in Switzerland. The husband, now aged 72, had amassed significant wealth during his career in financial services. In 2017, he transferred a substantial portfolio of investments – valued at approximately £80 million at trial – to his wife (57) as part of a tax planning strategy. The intention was for the wife to establish trusts for their children, mitigating inheritance tax. However, she did not set up the trusts and retained the assets in her name.

The central issue before the courts was whether these assets, originally classified as non-matrimonial property (NMP), had become matrimonial property (MP) through the transfer, thus subject to the sharing principle in financial remedy proceedings under the Matrimonial Causes Act 1973.

The initial trial judge ruled that by transferring the assets to the wife, the previously non-matrimonial assets had been ‘matrimonialised,’ making them eligible for division. Nevertheless, due to the husband’s primary contribution, the division awarded him a 60% share.

Both husband and wife appealed, and the Court of Appeal partially overturned this. They decided that only 25% of the assets were matrimonial property. The husband was entitled to 75% of the assets plus half of the remaining 25%, significantly reducing the wife’s share.

Supreme Court Judgment

The wife appealed to the Supreme Court. She argued that the assets should be seen as a gift to her and therefore treated fully as matrimonial property. The Supreme Court unanimously dismissed her appeal and upheld the Court of Appeal’s ruling.

Reasons for the judgment

In a detailed judgment, Lords Burrows and Stephens set out five guiding principles on the application of the sharing principle:

1. There is a ‘conceptional’ distinction between NMP and MP. Non-matrimonial property typically includes assets acquired before the marriage or through external gifts or inheritance. Matrimonial property comprises assets derived from the couple’s joint efforts or contributions during the marriage. Which party has legal title to the property is not determinative of whether it is MP or NMP.
2. Sharing principle scope: The sharing principle applies strictly to matrimonial property and not to non-matrimonial property.
3. Starting point of equal division. The starting point is that matrimonial property should be shared on an equal basis (though there may be justified departures from that position)
4. ‘Matrimonialisation’ concept. While noting that the word appeared to be a new addition to the English language the Court said the term ‘matrimonialisation’ was a useful term for where non-matrimonial property can become matrimonial where, over time, the asset is treated as jointly shared by the couple.
5. Tax-driven transfers. Transfers purely for tax efficiency do not imply that an asset has been shared in the marital partnership and do not lead to ‘matrimonialisation’.

Applying these principles, the Court found that the 2017 assets remained largely non-matrimonial. This was because the transfer was aimed at tax planning and intended for the children’s benefit, not for the wife.

The Coodes view

Commenting on the judgment, Sarah Evans, Head of Family at Coodes Solicitors, said:

“The Supreme Court’s decision in Standish v Standish brings much-needed clarity to the boundaries of matrimonial and non-matrimonial property. It reinforces that tax planning alone does not convert individual wealth into shared marital assets. This distinction that will shape future financial remedy cases with greater certainty.

“Perhaps of more widespread impact than the niche tax-related implications of the case is the Court’s clear direction on the sharing principle, which it acknowledges itself covers ground courts have previously been reluctant to tread.

“ … though courts have been reluctant previously to say so, the time has come to recognise that the sharing principle applies only to MP and not to NMP (although NMP can be subject to what have been termed the “needs” and “compensation” principles that are not in issue on this appeal).”

“This decision provides a definitive framework for distinguishing between matrimonial and non-matrimonial assets in complex financial remedy cases. It offers reassurance to individuals concerned about protecting pre-marital or independently acquired wealth and will guide family law practitioners and financial planners in advising clients on asset structuring and planning both during and after marriage.”

At Coodes Solicitors, our expert Family team, led by Sarah Evans, is on hand to advise. Get in touch if you need advice on protecting your financial interests in divorce or separation. Alternatively, if you are wondering how this landmark ruling might affect your circumstances, we can help. Contact Sarah by emailing sarah.evans@coodes.co.uk or call 01579 324 010.