Supreme Court Clarifies Asset Division In Divorce – Standish v Standish

This judgment marks a pivotal moment in family law, particularly for high-net-worth individuals and private clients seeking certainty in wealth protection and tax planning.

This judgment firmly establishes that non-matrimonial property — typically acquired before the marriage — should not be subject to the equal sharing principle. It also confirms that tax planning alone does not convert non-matrimonial assets into matrimonial ones. Importantly, the Court has drawn a principled distinction between assets built within the marriage and those brought into it, while recognising that over time, non-matrimonial property may become matrimonial if it is shared or integrated into the marital partnership.

The Supreme Court ruling brings long-overdue clarity to an area of law that has remained uncertain for years. It is a significant and reassuring development which provides a clearer framework for asset protection and helps to inform future tax planning strategies with greater confidence.

Key principles from the Judgment:

1. Matrimonial vs non-matrimonial property
   The Court reaffirmed that property acquired before the marriage—non-matrimonial property—should be treated differently from assets built up during the marriage. This distinction is rooted in the principle of fairness, which underpins financial remedy proceedings under the Matrimonial Causes Act 1973.
2. Exclusion from equal sharing
   For the first time, the Supreme Court has explicitly stated that non-matrimonial property should not be subject to the equal sharing principle. This provides a clear legal foundation for protecting pre-marital and inherited wealth, especially in cases where one party enters the marriage with significantly greater assets.
3. 50/50 sharing for matrimonial assets
   The Court upheld the long-standing principle that matrimonial property should ordinarily be shared equally between spouses. This includes assets acquired during the marriage through joint effort or mutual contribution, whether financial or non-financial.
4. Conversion through use or sharing
   The judgment recognises that non-matrimonial assets may become matrimonial if they are used or shared in a way that integrates them into the marital partnership. For example, if a pre-marital property is used as the family home or if inherited funds are deposited into a joint account and used for family expenses, they may lose their non-matrimonial character.
5. Tax planning does not equal sharing
   Crucially, the Court held that tax-motivated transfers between spouses do not, in themselves, convert non-matrimonial property into matrimonial property. This clarification is particularly relevant for private clients who engage in inter-spousal transfers for inheritance tax or capital gains tax efficiency.

The Court’s reasoning reflects a desire to balance fairness with respect for individual property rights. It acknowledged that while marriage is a partnership, it does not automatically entitle one spouse to a share of the other’s pre-existing wealth unless that wealth has been treated as part of the marital economy.

Broader implications

The ruling is expected to influence how prenuptial and postnuptial agreements are drafted and interpreted, as it strengthens the legal framework for distinguishing between different classes of property. It also provides greater predictability for litigants and practitioners, reducing the scope for discretionary outcomes in financial remedy cases.

For family lawyers, wealth managers, and tax advisers, Standish v Standish offers a more robust foundation for advising clients on asset protection strategies before and during marriage. It may also lead to fewer disputes over inherited or gifted assets, provided they are kept separate and not mingled with joint resources.

How Wedlake Bell can help

If you are affected by any of the issues in this please contact Alex Davies or another member of the Family Law team.

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   • Alex Davies

   • Partner
   • Family & Divorce

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