On 2 July the Supreme Court handed down its judgment in Standish v Standish [2025] UKSC 26. It dealt with the distinction between matrimonial and non-matrimonial property, and circumstances in which non-matrimonial property may become matrimonial property by virtue of ‘matrimonialisation’.
The key issue was the 2017 transfer of £80m by the husband to the wife. The transfer was part of a scheme to reduce inheritance tax. The money originally formed part of the husband’s non-matrimonial property, although the wife contended that it had become matrimonialised, by virtue of it being placed in her name. She therefore argued that it should be shared equally.
The Court of Appeal ([2024] EWCA Civ 567) held that by placing assets in the wife’s name, they did not become matrimonial property and therefore were not subject to the sharing principle. The wife’s appeal to the Supreme Court failed. It upheld the Court of Appeal’s view that the placing of assets in the other party’s name for tax-avoidance purposes does not convert those assets into matrimonial property.
It has long been established that matrimonial property should normally be shared on an equal basis, unless issues of needs or compensation are engaged. The Supreme Court went on to say: ‘Although there can be justified departures from that, equal sharing is the appropriate and principled starting position. Indeed, once non-matrimonial property is excluded, much of the justification for not applying equality in sharing fades away.’
Accordingly, as far as matrimonial property is concerned, the Supreme Court’s decision does not mark any significant development.
The first significant part of the judgment is the clear statement by the Supreme Court that ‘the time has come to make clear that non-matrimonial property should not be subject to the sharing principle’. The Supreme Court does, however, acknowledge that non-matrimonial property can be subject to the principles of needs and compensation.
The Supreme Court acknowledged that: ‘With some exceptions… the courts have been reluctant firmly to say that non-matrimonial property is not subject to the sharing principle.’
The judgment refers to earlier decisions, but notes that in those no specific example has been given of when there would be a sharing of non-matrimonial property. On this issue, the Supreme Court concludes: ‘Although courts have a broad discretion in this area and despite the temptation to “never say never”, it is our view that the distinction between matrimonial and non-matrimonial property becomes largely meaningless if the sharing principle applies to the latter as well as the former.’
The second key element of the judgment deals with how non-matrimonial property may become matrimonial property through the process of ‘matrimonialisation’, a word originally used by Roberts J in WX v HX [2021] EWHC 241 (Fam).
The Supreme Court cited the judgment of Wilson LJ in K v L [2011] EWCA Civ 550. Although Wilson LJ did not use the word ‘matrimonialisation’, he set out three scenarios in which it may happen:
a) Over time matrimonial property of such value has been acquired as to diminish the significance of the initial non-matrimonial property.
b) Over time the non-matrimonial property has been mixed with matrimonial property in circumstances in which the contributor may be said to have accepted that it should be treated as matrimonial property or in which the task of identifying the value of the non-matrimonial property is too difficult.
c) The non-matrimonial property has been invested in the purchase of a matrimonial home, and even if held in the sole name of one party, over time has been treated by the parties as a central item of matrimonial property.
The Supreme Court endorsed the comments of Wilson LJ, although it emphasised that these were not exclusive categories. It disagreed with Moylan LJ in the Standish Court of Appeal decision, in which he said that ‘the concept of matrimonialisation should be applied narrowly’. The Supreme Court said: ‘There is no good reason to treat matrimonialisation as a narrow concept. It is neither narrow nor wide.’
Of the three scenarios put forward by Wilson LJ, the second is most problematic. When and how does matrimonialisation take place? The Supreme Court agreed with the analysis of Peter Duckworth in Matrimonial Property and Finance (2025). It ‘is governed by the parties’ intentions and how they treat the relevant asset over a period of time. Thus where a party has demonstrated an intention to use an inheritance for the benefit of the family, by translating it into actual use and enjoyment, the parties have elected to treat it as matrimonial property, even if its origin was from outside the marriage’.
The Supreme Court concluded: ‘It is our view that it is the parties’ treatment of what was initially non-matrimonial property, over time, as shared between them, that is central in deciding the fairness of that property being viewed as matrimonialised.’
Some of the key practical implications:
a) Non-matrimonial property will not be shared, unless required by the needs or compensation principles.
b) Once an asset becomes matrimonial property, it will usually be shared equally. Accordingly, if an asset has become matrimonialised, an equal division would be the starting point. There can be ‘justified departures’ from equality, but they are not specified further in the judgment.
c) The key evidential issue in many divorces will therefore be whether an asset has become matrimonialised. This is likely to become the subject of detailed evidence in section 25 statements, setting out how exactly an asset was treated during the course of the marriage and the extent to which financial benefits were derived.
d) Reference is made to how assets may be treated ‘over time’ to become matrimonialised. It is possible that matrimonialisation is more likely to happen during a longer marriage.
Andrew Newbury is a partner at Hall Brown Family Law, Manchester
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