UK Supreme Court Clarifies Limits of Asset Sharing in Standish v Standish [2025] UKSC 26
A landmark ruling issued today the UK Supreme Court has provided long-awaited clarity on how non-matrimonial property should be treated on divorce.
The appeal concerns the division of the parties’ assets upon divorce. The husband is now aged 72 and the wife 57. The husband had a very successful career in the financial services industry, during which he acquired very considerable wealth prior to the marriage. They began living together in 2004 and were married in 2005. They have two children together. The marriage broke down in early 2020.
This appeal concerns a portfolio of investments which the husband transferred from his sole name into the wife’s sole name in 2017. By the time of trial, “the 2017 Assets” were worth approximately £80 million. The transfer to the wife was part of a tax planning scheme. The husband’s intention was for the wife to place the 2017 Assets in trusts for the children thereby negating inheritance tax. The wife did not set up the trusts and she continued to hold the 2017 Assets in her sole name.
The marriage broke down in 2020 and their financial dispute ended up before the High Court, the Court of Appeal, and ultimately the Supreme Court. The central legal question was whether the 2017 Assets , should be treated as matrimonial property (and thus subject to the sharing principle) or remain non-matrimonial.
The overall aim of a court in making a financial order on divorce is to achieve a fair outcome. In so doing, courts are guided by certain key principles . This appeal concerns, in particular, the “sharing principle”. Lord Burrows and Lord Stephens set out the following five principles that are relevant to the application of the sharing principle:
1. There is a clear distinction between matrimonial and non-matrimonial property (typically pre-marital assets, or assets acquired through gift or inheritance).
2. The sharing principle does not apply to non-matrimonial assets (save for when required to meet needs).
3. The starting point is that matrimonial property should be divided equally.
4. Non-matrimonial property can become matrimonial property, if, over time, the parties have treated it as shared.
5. A transfer of an asset between spouses in a scheme designed to save tax, irrespective of the time period involved, will not normally show that the asset is being treated as shared between the spouses.
The Supreme Court has today upheld the decision of the Court of Appeal and dismissed the wife’s appeal. The result is that the husband will retain
the majority of the 2017 Assets as they retained their non-matrimonial status and were therefore not subject to the sharing principle.
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