Megan Wroe

Assets are typically divided into ‘matrimonial’ and ‘non-matrimonial’ categories. Non-matrimonial assets, such as inherited wealth or assets acquired prior to marriage, can be excluded from the sharing principle. Read about divorce and finances on our webpage.

However, some non-matrimonial assets can become ‘matrimonialised’ and part of the matrimonial pot, such as a property that becomes the family home.

In the Standish v Standish case, the Supreme Court clarified the interpretation of ‘matrimonialisation’, stating that it depends on how the parties have treated an asset and whether this has been treated as shared by the parties over time.

Mr Standish, a wealthy and successful man, owned a farm and farm business, property in Melbourne, and significant investments. His wealth was valued at £57 million in 2004 (equivalent to £155 million today). Mrs Standish’s assets were significantly lower, consisting of inheritance, a property in Melbourne, and bank funds.

The couple separated in 2020 after 15 years of marriage.

In 2017, Mr Standish transferred £78 million of investment funds from his sole name to his wife’s sole name and issued shares in the farming business to her.  This was for tax reasons and to take advantage of the wife’s UK non-domicile status. The intention was for her to put the funds into a discretionary trust in Jersey for their children, but she never did that. Consequently, these assets, which were the majority of the couple’s assets, were in her sole name.

Mrs Standish argued that the funds were now hers and not matrimonial assets, while Mr Standish claimed that she should only receive assets based on her needs and that he should keep the rest.

Initially, the High Court found that the transfers were matrimonial assets and not owned by Mrs Standish alone. It also found that Mr Standish’s wealth had started as non-matrimonial but had been ‘matrimonialised’ by the tax planning exercise. However, recognising the origin of the majority of the assets, the court made the overall split at 34% to the wife and 66% to the husband, meaning she was awarded £45 million.

Both parties appealed, maintaining their positions, with the wife claiming that if the assets had been classed as matrimonialised, they should be subject to the sharing principle and the split was unfair.

The Court of Appeal concluded that the 2017 transfer of the investment funds was irrelevant, the parties had never treated the assets as shared and instead  they had been given to the wife for tax avoidance purposes and for the benefit of their children. They remained the husband’s property.

In a landmark case, the Court of Appeal reduced the wife’s award to 19% of the assets (£25 million). She appealed to the Supreme Court this year, but it upheld the Court of Appeal’s judgment.

Megan Wroe, a solicitor in Graysons’ family department, says:

“The Supreme Court’s ruling in this case brings some clarity to how the court will treat matrimonial and non-matrimonial assets. However, it is important to note that in this case the high value of the assets ensured both parties’ needs were met and no specific assessment of needs was required. .  The courts have significant discretion in determining financial settlements and consider asset division based on individual case issues, with the principles of ‘needs’, ‘sharing’ and ‘compensation’ guiding these decisions”.

If you’re divorcing and want to ensure a fair financial settlement, contact our experts now.

Author: Megan Wroe