Courts in England and Wales have a wide discretion when making financial remedy orders in divorce cases. This gives judges the leeway to reach decisions that meet the needs of the spouses having regard to the overall circumstances of the case.
Critics of this approach however say that there is not enough certainty about how judges reach their decisions in practice. And this makes it difficult for litigants and their solicitors to know how their case may turn out, reducing the prospect of couples taking a constructive approach and resolving cases by negotiation and avoiding court.
In the case of Standish and Standish (July 2025) however, the Supreme Court provided some much-needed clarity on one key area of financial remedies: the question of whether the so-called ‘sharing principle’ should apply to non-matrimonial assets. The court ruled that while there has been a reluctance for courts to acknowledged it explicitly in the past, the time had come to recognise that the sharing principle applies only to matrimonial property and not to non-matrimonial property.
The decision is important because it means that in future it will be more difficult for a spouse to claim a share in wealth accumulated by the other spouse before marriage or to seek a share of inheritance and gifts the other spouse may receive during the marriage.
Standish v Standish (2025)
We have previously discussed the Court of Appeal decision in Standish. We examined the sharing principle and described the key differences between matrimonial property and non-matrimonial property.
Briefly, the main focus of argument in the Standish case was a portion of assets, valued at around £80 million, which the husband had acquired before his marriage. At the time of the divorce the assets were in the sole name of the wife because the husband had transferred then to her as part of a tax planning exercise. The intention was that the wife would put the assets in a trust for the benefit of the couple’s two children, but she didn’t do so before divorce proceedings started.
The wife contended that the property was joint, matrimonial property and should be shared. The husband disagreed. As we’ll see, the Supreme Court came down in favour of the husband. We look at the court’s reasoning below and highlight the helpful guidance the case provides on the treatment of marital and non-marital assets.
The Sharing Principle – 3 Rules
The court set out three principles governing how the sharing principle works in practice. It said that:
- There’s an important distinction between matrimonial and non-matrimonial property. Non-matrimonial property is property brought into the marriage by one of the parties or property acquired by one of the parties by an inheritance or gift. Matrimonial property is property that reflects the marriage partnership or is the product of the parties’ common endeavour. (Particularly relevant to the Standish case is that it does not matter in whose name particular property is held.)
- It was time to make clear that non-matrimonial property should not be subject to the sharing principle (though it can be used to meet needs)
- The sharing of the matrimonial property should normally be on an equal basis. Once non-matrimonial property is excluded, much of the justification for not dividing matrimonial property equally fades away
Can non matrimonial assets ever become matrimonial?
The courts also clarified that what starts as non-matrimonial property can sometimes become matrimonial property (and therefore be shared as part of a settlement). This is known as ‘matrimonialisation’ and occurs when during the marriage the parties.
treat the asset as shared. In the present case where the husband transferred assets to the wife as part of a plan to save tax, the court did not believe that indicated an intention for the assets to be shared. The goal was purely to save tax.
Comment
The Supreme Court in Standish could not have been clearer. It has ensured that non-matrimonial assets belonging to one spouse are now more protected from financial claims by the other. Non-matrimonial property will not be shared, unless required by the needs or compensation principles. It’s likely that disputes in this area will in future focus on the issue of matrimonialisation and whether property belonging to one spouse before marriage was treated in such a way as to convert it into an asset that should be shared.