Standish v Standish

The sharing principle applies only to matrimonial property. Non-matrimonial property may instead be available to meet needs or compensation. Matrimonial property should normally be shared equally, subject to a justified departure.

Non-matrimonial property becomes matrimonialised when the spouses’ dealings show that, over a sufficiently long period, they settled upon treating it as shared. Legal title is not determinative. Matrimonialisation is neither a narrow nor a wide concept.

A transfer between spouses under a tax-planning scheme does not ordinarily establish shared treatment. Further compelling evidence is required. Property transferred to benefit children and save inheritance tax therefore remains non-matrimonial where the spouses never treated it as shared.

The husband transferred investment assets worth about £80 million to the wife in 2017. The transfer formed part of an inheritance-tax planning scheme under which the wife was expected to place the assets in trusts for their children. The trusts were never established.

Moor J, in ARQ v YAQ [2022] EWFC 128, treated the whole transfer as matrimonial property and awarded the wife £45 million. The Court of Appeal, [2024] EWCA Civ 567, held that 75% remained non-matrimonial, reduced the sharing award to about £25 million and remitted the case for an assessment of the wife’s needs.

The wife appealed on the ground that the transfer had matrimonialised the assets. The central issue was when non-matrimonial property becomes subject to the sharing principle under section 25 of the Matrimonial Causes Act 1973.

1. The appeal was dismissed unanimously. Lord Burrows and Lord Stephens delivered the joint judgment, with which Lord Reed, Lord Lloyd-Jones and Lady Simler agreed. The decision and orders of the Court of Appeal were upheld.

2. The Matrimonial Causes Act 1973 gives the court a wide discretion directed towards a fair outcome. The needs, compensation and sharing principles guide that discretion. The sharing principle applies only to matrimonial property. It does not apply to non-matrimonial property, although the latter remains available under the needs and compensation principles. The contrary approach in Charman v Charman (No 4) [2007] EWCA Civ 503 was displaced: paras 46–50.

3. Whether property is matrimonial depends principally upon its source, rather than legal title. Matrimonial property comprises the fruits of the marriage partnership or the parties’ common endeavour. Non-matrimonial property typically comprises property brought into the marriage or received by one spouse through an external gift or inheritance: para 47.

4. Matrimonial property should normally be shared equally. Equality is the principled starting point, although a justified departure remains possible: para 50.

5. Non-matrimonial property may become matrimonial property through matrimonialisation. The concept is neither narrow nor wide, and the situations discussed in K v L [2011] EWCA Civ 550 are not exhaustive. The central inquiry is how the spouses dealt with the asset and whether, over a sufficiently long period, they treated it as shared. The treatment must have become settled: paras 51–54 and 60.

6. Matrimonialisation may also be justified pragmatically where the non-matrimonial element is too insignificant to warrant the cost of identifying it. Fairness may then require the whole asset to be treated as matrimonial: para 55.

7. An inter-spousal transfer made to save tax does not normally show that the capital asset was treated as shared. Further compelling evidence is required: para 56. Here the husband transferred the assets to negate inheritance tax and intended the wife to establish trusts exclusively for the children’s benefit. The spouses never treated the assets as shared. Accordingly, the non-matrimonial 75% was not matrimonialised and remained outside the sharing principle: paras 57–64.

1. United Kingdom Supreme Court: The wife’s appeal was dismissed unanimously and the Court of Appeal’s decision and orders were upheld: [2025] UKSC 26.
2. Court of Appeal: The court allowed the husband’s appeal, held that 75% of the transferred assets remained non-matrimonial, reduced the wife’s sharing award to about £25 million and remitted the case for a needs assessment: [2024] EWCA Civ 567; [2024] 4 WLR 60.
3. Family Court: Moor J held that the transfer had matrimonialised the assets, awarded the wife £45 million and considered a separate needs assessment unnecessary: [2022] EWFC 128; [2022] 4 WLR 112.