During divorce proceedings, the courts in England and Wales consider the financial situation of both parties. They do this based on several principles.
The three key principles are needs, compensation and sharing. Many family cases have shown that when a couple separates, they often share what they earned during their marriage. The starting point on divorce is equality (being 50/50), but there are many factors that might change this.
The case
On 2 July 2025, the Supreme Court delivered its landmark decision in the case of Standish v Standish. The case between a divorcing couple centred around investments transferred from the husband to the wife during the marriage worth £77.8m as a tax planning exercise to preserve the assets for the children of the family.
The investments were originally accumulated prior to the marriage. In the first instance, a judge found the assets to ultimately be matrimonial and split them between the parties (66/34 to the husband). The wife appealed the decision, and the husband followed with a cross-appeal. The Court of Appeal found that the husband transferring the investments to the wife did not mean they automatically became “matrimonialised”.
The Court of Appeal found that at least 75% of the assets were non-matrimonial, which changed the proportions awarded to the husband and wife to 81/19 respectively. The wife’s award was reduced from £45 million to £25 million as a result.
The Supreme Court decision
The wife appealed this decision to the Supreme Court, the highest appeal court in the United Kingdom, arguing that the assets were matrimonial property and should be subject to the sharing principle.
The Supreme Court agreed with the decision of the Court of Appeal. The Court stated it is “now time to make clear that non-matrimonial property should not be subject to the sharing principle”. The Court noted the primary importance of considering how the husband and wife had been dealing with the asset and whether they had been treating it as shared between them. How it had been treated would then determine whether the asset had been subject to what the Court referred to as ‘matrimonialisation’.
In this case, the wife had not shown that the parties were treating the asset as shared between them. In fact, the transfer of the investments was for the benefit of their children, in a scheme to negate inheritance tax. In the judgment, it was found that “the Court of Appeal was correct that none of the non-matrimonial proportion of the assets was matrimonialised. That percentage remains non-matrimonial property and is not subject to the sharing principle.” They ruled that 75% of the investments were to remain with the husband. Only the matrimonial assets are therefore to be shared equally between the parties.
Conclusion
The decision of the Supreme Court shows that in cases where there are enough assets to meet both parties’ needs, assets that come from outside the marriage do not necessarily have to be shared. Instead, when looking at non-matrimonial property, the court will consider how the couple have treated that asset during the relationship when deciding whether it should be shared. There is no fixed formula, and a range of factors may influence the court’s decision.
Although the sharing principle has now been confirmed as not applying to non-matrimonial property in high-wealth cases, the principles of needs and compensation were not considered in this instance due to the substantial assets available to both parties. In other cases, particularly those involving less wealth than Mr and Mrs Standish, non-matrimonial property may still be shared if needed to meet needs or provide compensation.
The decision offers guidance to English and Welsh courts on how to approach non-matrimonial assets in high-value divorces. It has broad implications for separating couples, especially where significant assets pre-date the marriage. While Standish v Standish is an important decision that sets out a useful framework for the family courts, most everyday cases involve more modest finances, and non-matrimonial property may still be shared to meet needs.
For more guidance on how to protect non-matrimonial assets, the Private Family team have summarised this here. For any further information or support, the team would be happy to assist and answer any queries you may have.
