In brief
- In TP v TF [2026] EWFC 210, the High Court considered whether assets in longstanding family trusts (some of which were discretionary) were available to the husband as a capital resource and, therefore, to be treated as an asset of his within divorce proceedings.
- Applying the Charman v Charman [2007] EWCA Civ 503 test, the Court focused on practical access to trust assets rather than legal ownership or control. The Court found that the trustees' correspondence indicated that they would make the husband's notional allocation available to him if asked.
- The test in Standish v Standish [2025] UKSC 26 was applied. Notwithstanding that the trusts were settled long before the marriage, the husband's interests in the trust assets pre and post marriage were considered to be matrimonial to which the equal sharing principle applied.
- The husband was ordered to pay approximately £120.4 million to the wife. The decision highlights that trusts established long before marriage, and initially settled with assets inherited by one spouse, can be made available to the other spouse on divorce.
Introduction
The recent High Court judgment in the case of TP v TF, handed down in July 2026 by Mr Justice Garrido, is expected to have a significant impact on future matrimonial proceedings where they concern questions about the treatment of assets held within longstanding discretionary trusts, even those established long before marriage.
In this instance, the Court rejected the husband's claim that his interest in the trusts should not be treated as a capital resource, or if a capital resource, that they should not be treated as matrimonial assets.
Background
The parties, TP (the wife, W) and TF (the husband, H) married in 2001, and separated in 2024. They had two children and were both 63 at the time of the final hearing of the divorce in 2026, by which point they had spent in the region of £6.5 million in legal fees.
H's family members had settled a number of trusts, many of which were settled some 50 years before H and W's marriage. By the time of the divorce, the trust structure was worth many billions of pounds. H and W, and their children, were discretionary beneficiaries of a number of the trusts within the structure. W's discretionary interest in those trusts ceased upon divorce. The primary asset was shares in a profitable company (the Company), the sale of which was in contemplation.
There was a family agreement that H would be entitled to a 2.5% notional allocation of equity in the Company provided he worked in the business for 30 years. This notional allocation was referred to as "CAP". His CAP allocation was later reduced to 2.1% on account of the fact that he left the business prior to expiry of the 30 year period.
H settled shares in the Company which he had inherited into a number of life interest trusts (LITs) within the structure. He was the life tenant with an entitlement to the income (and the trustees also had a discretionary power of appointment in respect of capital).
In addition to CAP, H was later given a further 2.5% notional allocation of trust assets (documented in a memorandum of understanding). CAP and H's 2.5% silo were accepted to reflect his minimum interest in the trusts. Within his Form E for the purposes of the divorce, H indicated that his interest in trust assets (including the entirety of CAP and all the life interest trusts) was valued at around £378 million.
In the period since H and W married in 2001, H had never received any distributions from the discretionary trusts. As to the LITs, he had only once received a capital distribution.
The central issue in the case was whether H's interest in the family trusts meant that the trust assets (or a portion of them) were capital resources available to him; if so, the question for the Court was to what extent those resources constituted matrimonial assets. W did not go as far as to suggest that the entirety of H's 2.5% silo was a capital resource for H, but she invited the Court to conclude that 100% of the value of CAP was.
The Charman test – are the assets a capital resource?
The Court applied the well-established test in Charman v Charman: if H were to make a request to the trustees, would the trustees be likely to advance the whole or part of the trust assets to him, now or in the foreseeable future? The focus of the Charman test is practical access to the trust assets, as opposed to legal ownership or control.
The trustees wrote to H's solicitors in the context of the divorce proceedings saying that they "would be minded to make available to H, the vast majority, and potentially the entirety, of the value of CAP". W relied on this and the fact that H had never previously had a distribution request turned down by the trustees to argue that the trust assets, and particularly CAP, were capital resources of H. She also observed that H's siblings had, at their request, received distributions of the entirety of their respective notional shares of the trust assets, and contended that the trustees would do the same for H if asked. W's position was that the impending sale of the Company significantly increased the prospect of substantial capital distributions.
Amongst other arguments, H contended that the Court should adopt a conservative approach to the question of what "vast majority" meant given that the trustees would be obliged to consider the interests of future issue (given H and W's children were within the beneficial class of the discretionary trusts and had notional allocations of their own and were default beneficiaries of some of the LITs). The Court did not specifically address this point in its judgment.
The Court considered the trusts' purposes, historic distributions, contemporaneous documentation (to which significant weight was given) and the trustees' Charman response. It found that "the vast majority" meant at least 95%, and that "potentially the entirety" showed a genuine willingness by the trustees to release the whole amount of CAP. The Court concluded the trustees would likely make all of CAP available if asked; as such it was found to be a capital resource for H.
The Court found that, although the word "potentially" was open to interpretation, it recognised that that the Charman response would be "carefully caveated so as to avoid the impermissible fettering of the trustees' future discretion".
Insofar as H's interest in trust assets outside of CAP were concerned, the trustees said in their Charman response that they "could not currently envisage a scenario in which they would" distribute funds over and above CAP. As such, the Court found that the trustees would likely make the entirety of CAP available, but would do so in the context that they say they could not envisage going further. It was recognised by the Court that distributing the value of CAP would likely involve a distribution from the other trust assets that W was seeking to include as H's additional resources.
Matrimonial or non-matrimonial assets
Having determined that the entirety of CAP was a capital resource, the Court turned to the matter of whether it was 'matrimonial property' which would be subject to sharing, or 'non-matrimonial property' from outside the marriage (and, therefore, not subject to sharing, unless it had become matrimonial through 'matrimonialisation').
H argued CAP was conditional inheritance which sat entirely outside the marriage, and therefore non-matrimonial. W contended that CAP had been agreed to recognise H's contribution to the family business. This contention was supported by the reduction of CAP from 2.5% to 2.1%, suggesting that it was 'reward' instead of inheritance.
Applying the Supreme Court's guidance on matrimonialisation in Standish v Standish, the Court agreed with W's position and found that CAP's purpose had always been to reward H's efforts for the business. His CAP value built up from 2001 was, therefore, to be considered matrimonial and therefore eligible for division.
Some controversy arose in respect of the pre-2001 (i.e. pre-marital) value of CAP, which was treated by the Court in the same way as the post-2001 value (i.e. as a matrimonial asset). The Court took this approach on the basis that the pre-2001 growth was not sufficiently significant to be treated separately from the post-marital share of CAP and on the basis that H's rise in seniority in the family business had happened mostly during the marriage. As a result, the pre-2001 CAP value was treated as matrimonialised.
Decision
H was ordered to pay W approximately £120.4 million, reflecting an equal split of CAP's net value after tax together with the non-trust assets, which H had already conceded should be split equally.
In terms of payment of the award, H was ordered to pay to W £5 million within 14 days of the order, with a further £12 million to follow within 90 days. The Court stated that payment of the balance "will be dependent on a further distribution from the trustees".
W had expressed concerns in closing submissions about H's potential future non-compliance with the award and suggested that security might be justified. The Court was not willing to provide an indication of its views on this point at that time.
Given many of the family trusts and underlying assets were structured within offshore jurisdictions, it will be interesting to see how the judgment is enforced in overseas jurisdictions where there may be firewall provisions.
Key points to note
Significant weight was placed on the trustees' contemporaneous documentation, which highlights the importance not only of accurate trustee record-keeping, but careful drafting both within and outside the context of litigation.
A spouse's discretionary interest in trust assets, as well as a spouse's interest in trust assets where they have received little to no capital distributions, seem to be becoming increasingly easier to attack in the context of divorce proceedings.
Longstanding family assets held within trusts can become matrimonialised and, therefore, in many cases, shared equally on divorce, even where the settling of those trusts predate the marriage by decades.
It is interesting that the Court was not persuaded that the trustees should be obliged to preserve capital wealth for the future generations such that the percentage of CAP found to be a capital resource should be reduced.
Ultimately, this case highlights the importance of obtaining both trust and family litigation advice at the earliest stage.