Standish v Standish: Supreme Court rewrites the rules on matrimonialisation

A claim for financial provision on divorce reaching the Supreme Court is a cause of much excitement among financial remedy specialists; it is not often that we benefit from Supreme Court guidance. As the judgment in Standish v Standish [2025] UKSC 26 highlighted, it is almost 20 years since our highest court last considered the distinction between matrimonial and non-matrimonial property. Yet despite offering some clarification, the judgment raises further questions and arguably strengthens the case for a comprehensive review of financial remedy law. 

Since Miller v Miller and McFarlane v McFarlane [2006] UKHL 24, the classification of assets as “matrimonial” or “non-matrimonial” has become the starting point in divorces where the parties’ assets exceed their needs. The law is now relatively clear on which assets are matrimonial, and therefore shared on divorce, usually equally, and which are non-matrimonial and not shared. What has remained less clear are the circumstances in which non-matrimonial assets may become matrimonial, and this was the focus of Standish.

The Supreme Court defined the two categories as follows: “non-matrimonial property is typically pre-marital property brought into the marriage by one of the parties or property acquired by one of the parties by external inheritance or gift. In contrast, matrimonial property is property that comprises the fruits of the marriage partnership or reflects the marriage partnership or is the product of the parties’ common endeavour.” (paragraph 47)

The family home has also generally been considered matrimonial property regardless of its source; a point absent from the Supreme Court’s articulation. The judgment’s confirmation that “the sharing of the matrimonial property should normally be on an equal basis” reflects current practice. The Supreme Court clarified that “non-matrimonial property should not be subject to the sharing principle”; whilst there are no reported cases of non-matrimonial property being shared, judges have hitherto stopped short of holding that this can never happen. 

It was made clear in Miller/McFarlane that non-matrimonial property can, however, change character and become subject to sharing. Lord Nicholls held that “sometimes, as the years pass, the weight fairly to be attributed to [the source of an asset] will diminish, sometimes it will not… a relevant matter [in determining this is] the way the parties organised their financial affairs”. 

Five years later in K v L [2011] EWCA Civ 550 Wilson LJ held that this transformation would happen where: “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] the contributor of the non-matrimonial property has chosen to invest it in the purchase of a matrimonial home which, although vested in his or her sole name, has – as in most cases one would expect – come over time to be treated by the parties as a central item of matrimonial property.” 

It would then become subject to the sharing principle, though its origins as non-matrimonial may justify an unequal division. This became known as “matrimonialisation”. 

In Standish, the issue was whether £80m transferred by Mr Standish to his wife to take advantage of her non-domiciled status, with the intention, never realised, that the funds would be transferred into trusts for the children, had been matrimonialised. 

At first instance Moor J held that the assets could not have remained Mr Standish’s non-matrimonial property “as he had to give up all interest in them for the tax saving scheme to work”. They had thus become matrimonial in nature, but given their non-matrimonial source the judge ordered that they be shared unequally in Mr Standish’s favour. (ARQ v YAQ [2022] EWFC 128 at paragraph 75). 

The Court of Appeal and Supreme Court disagreed, albeit for slightly different reasons. Dismissing Mrs Standish’s appeal, the Supreme Court reformulated the test for matrimonialisation: “what is important… is to consider how the parties have been dealing with the asset and whether this shows that, over time, they have been treating the asset as shared between them... the period of time must be sufficiently long for the parties’ treatment of the asset as shared to be regarded as settled.”

The Supreme Court Justices found that on the facts before them there was “nothing to show that, over time, the parties were treating the [transferred] assets as shared between them. Rather the transfer was in pursuance of a scheme to negate inheritance tax and it was for the benefit exclusively of the children”. This sits uneasily with Moor J’s point that for the tax-planning to be effective the gift must have been unconditional; that a gift can be effective for inheritance tax purposes despite an intention that the recipient should not benefit is a somewhat challenging proposition. 

Looking at how we move forward, it is helpful to compare the Standish test to the K v L test:

• “mixed with matrimonial property” has been replaced with “treated as shared”;
• there is increased emphasis on the duration of this treatment; and
• there is no explicit reference to the parties’ matrimonial home.

Important questions of both practice and principle remain. 

In practical terms, the reformulation of the matrimonialisation test means the lower courts will need to begin afresh the task of interpretation and application. The extent to which the jurisprudence building on K v L remains relevant is unclear, as is whether there has been a shift in status of the matrimonial home. 

Standish offers little guidance on what it means to “treat” an asset as shared; all we are offered is an endorsement of the “essential thrust” of the view expressed in Peter Duckworth’s Matrimonial Property and Finance, a practitioners’ textbook, that: 

“matrimonial property is not something that is predetermined at the outset of a marriage, but 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 passage suggests that “treat” incorporates a mental and a practical element, requiring both an intention / election to share and actual sharing. Is the mental element to be presumed where the physical element is present unless it can be shown that shared use was not intended to generate shared rights? How much shared use will be needed to demonstrate that the treatment is “settled”? Will divorcing spouses need to gather evidence demonstrating their evolving approach to an asset, potentially over decades? 

As to principle, the judgment offers no reasoned explanation for why it is fair that the way parties treat an asset during their marriage should determine its treatment on divorce. Yet the fact that, in practice, few couples are likely to be aware of this consequence renders the question particularly important. It could be argued that the law is constructing a form of nuptial agreement – albeit one that arises without the parties’ awareness, let alone legal advice or financial disclosure.

The judgment also raises questions about autonomy within intimate relationships. Our understanding of economic abuse has developed significantly in recent years. Such abuse may involve one party, typically the husband, controlling all the family assets and restricting the wife’s access to them. In such cases, the husband’s non-matrimonial property may appear not to have been “treated as shared”, whilst any non-matrimonial property of the wife may seem to have been so treated. By contrast, a spouse who has sought to mitigate power imbalances arising from their wealth by encouraging joint ownership or use of assets, may be disadvantaged notwithstanding their lack of appreciation of the legal implications on divorce of an approach adopted to benefit their marriage.

These issues existed pre-Standish but the decision brings them into sharper focus. At a time when the Law Commission has concluded that the current law does not provide a cohesive framework capable of delivering fair and sufficiently certain outcomes, and amid high levels of  concern that economic abuse is not sufficiently taken into account in financial remedy proceedings, there is a clear need to re-examine the principles underpinning this area of law. 

In the meantime, it is more important than ever for couples to discuss from the outset how they intend to manage their assets during their marriage and in the event of divorce, and to consider formalising that understanding in a nuptial agreement.