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Standish v Standish – clarification on identifying matrimonial assets

Posted on 11 June 2024

One of the key questions in financial remedy cases is whether an asset is "matrimonial" (in which case, it is likely to be shared by the parties) or "non-matrimonial" (in which case, subject to the parties' needs, it won't be shared). The Court of Appeal has recently provided clarification as to when property should (or should not) be treated as matrimonial, and when an asset that was originally non-matrimonial, might be "matrimonialised" and so subject to sharing.


The husband (H) had very significant wealth prior to the marriage, although he generated further wealth during it. H was originally from the UK but moved to Australia where he met the wife (W), an Australian national. H retired in 2007 and the parties moved to the UK in 2010. Prior to his becoming deemed domiciled in England in 2017, H was advised to transfer assets to W, on the basis that she would remain "non-dom" for tax purposes, which, it was said, would protect against inheritance tax. The intention was that W would subsequently place the assets in discretionary trusts in Jersey (albeit she never did). H transferred approximately £77M worth of assets to W on this basis (worth £80M by the time of the trial). On the parties' divorce, H asserted that the financial claims should be determined with reference to W's needs and the remainder returned to him.

W's case was that the marriage was a partnership of equals. There had been no pre-nuptial agreement prior to the marriage, to protect H's pre-acquired wealth, or post-nuptial agreement at the time of the 2017 transfers, which she argued demonstrated an intention to share all the assets transferred. Given that H had transferred the assets to her, with the intention of ownership passing to her (otherwise, he would have remained entitled to them for tax purposes), W's position was that the sums transferred to her became her separate property.


The Court of Appeal emphasised that the question of who held title to assets was not relevant as to whether they should be treated as matrimonial or not. Rather, the question is as to who had created those assets, and whether they had done so outside of the marriage. The source of, rather than the title to, the asset was the critical factor. The sharing principle was based on each party being entitled to an equal share of the matrimonial property built up by their endeavours during the marriage. To hold otherwise risked discrimination by dividing assets based on by whom they held, which, in the majority of cases, would be the financially stronger party. The Court of Appeal was also unimpressed with the argument that respecting the choice of the husband to transfer assets to the wife was in keeping with the principle of autonomy (i.e. that the decision to transfer assets to the wife should be treated in a similar way to a pre- or post-nuptial agreement). Nuptial agreements expressly seek to regulate the parties' financial affairs on the breakdown of their marriage, and required formalities, including disclosure and an awareness of the implications of the agreement. There was no suggestion that the same approach would or should apply to discussions that might have taken place during the marriage and which were not designed to deal with the financial consequences of divorce.

The Court of Appeal further considered the concept of "matrimonialisation", namely whether an asset that had been brought into the marriage by one party and would normally be treated as non-matrimonial could evolve into a matrimonial asset. It took the view that matrimonialisation remains a relevant concept, but should be narrowly construed, so that it is not used by parties in a way which would undermine the clarity of the sharing principle. The Court considered three ways in which assets could be matrimonialised:

  1. the percentage of the parties assets (or an asset) which might be said to be non-matrimonial was not sufficiently significant to be treated separately;
  2. where non-matrimonial property had been mixed with matrimonial property meaning that, in fairness, it should be included within the sharing principle; and
  3. where non-matrimonial property has been used in the purchase of the former matrimonial home, an asset which tended to be treated as matrimonial, regardless of its source.

Where an asset fell into category (a), the sharing principle would apply. Where an asset fell into category (c), the court will typically conclude that the former matrimonial home should be shared equally although this is not inevitable. Where, however, an asset fell into category (b), the court will have to consider whether fairness requires or justifies the asset being included within the sharing principle. If it does, that does not mean that it must be shared equally.

On the facts of the present case, the Court considered that, on a sharing basis, the wife should receive a total of £25M (as opposed to the figure of £45M the Judge at first instance had considered her to be entitled to). However, the Court at first instance had not carried out a needs assessment and so the case would need to be remitted to ensure that the £25M was in fact sufficient to meet W's needs.

The decision is a helpful one in clarifying which assets should be treated as matrimonial and which should be treated as non-matrimonial, regardless of in whose name they were held during the marriage. The reaffirmation of the principle of matrimonialisation is welcome in terms of affording a degree of flexibility where non-matrimonial assets have genuinely been mingled with non-matrimonial assets, although the principle will need to be applied with caution.

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